Gold and silver swing sharply as stronger core CPI keeps September Fed hike on the table

Gold and silver prices jumped in early U.S. trading Friday but remained extremely volatile after August core CPI came in hotter than expected, reinforcing expectations that the Federal Reserve could still deliver another rate increase at its Sept. 15–16 meeting. At the time of writing, spot gold traded near $4,377.40 an ounce, up 1.38%, while spot silver was at $64.945, up 2.12% on the session. Market positioning remains rate-negative for precious metals. Headline CPI held at 3.4% year over year in August, matching forecasts. Core CPI rose 0.3% month over month, above expectations for a 0.2% gain, while the annual core rate edged down to 2.4% from 2.5%. The CPI data follows Thursday's 0.4% monthly increase in PPI and the European Central Bank's 25-basis-point rate hike. Traders remain reluctant to challenge the "higher for longer" rate outlook. Fed hike odds had already moved into the upper-60% to low-70% range ahead of the release, and the core upside surprise keeps that pricing in place. Treasury yields are steady-to-firmer, with the two-year yield higher and the 10-year holding near the 4.95% area. The dollar remains supported. For gold, the takeaway is clear: the inflation print was not strong enough to trigger fresh panic, but not soft enough to revive the case for a pause favored by Waller.