Gold, silver fall after hotter-than-expected core CPI print

Australian lithium miners slide as spodumene prices fall 23% in Q3

Gold and silver futures declined on Tuesday after a higher-than-expected September core U.S. consumer price index reading lifted Treasury yields and the U.S. dollar, according to analyst commentary compiled by Dow Jones Newswires.

Peter Cardillo of Spartan Capital attributed the dollar’s gains to “geopolitical developments on the war front” and to the IMF chief saying that U.S. Treasury Secretary Scott Bessent’s growth plans were insufficient to address surging deficits and the mounting federal debt pile. “Ironically, these concerns provide another reason to buy precious metals,” Cardillo wrote. Gold for December delivery fell 1.2% to $4,126.50 a troy ounce, while silver fell 2.7% to $57.92 a troy ounce in morning trade. The core CPI reading exceeded analyst expectations, according to the analyst commentary.

In afternoon trade, gold for October delivery settled down 0.3% at $4,152.90 a troy ounce, with silver down 1.6% at $59.161. Critical Metals CEO Tony Sage said the market was awaiting Wednesday’s CPI release and its implications for Federal Reserve interest-rate policy. “Expectations of an October Fed rate hike remained subdued ahead of U.S. economic data this week, but markets are still pricing in a strong chance of a hike in December,” Sage wrote, warning that stronger prints “may lift the dollar and yields, pushing the yellow metal lower.”

Rio Tinto’s third-quarter production update was largely in line with expectations, according to RBC Capital Markets analyst Ben Davis. Pilbara iron ore shipments matched expectations; copper output ran 2% ahead of consensus while aluminum output lagged 6% below consensus. Davis noted that all guidance was maintained apart from lithium, which is now expected at the lower end of the guided range due to slower ramp-up at Sal de Vida in Argentina. Shares of Rio Tinto fell 0.3% in Sydney to A$160.48.

S&P Global Ratings said Saudi Arabian and U.A.E. chemical producers face a test of their ability to redirect exports as disruptions to shipping through the Strait of Hormuz continue. “Company results should provide evidence of how effectively producers have used alternative routes despite logistical constraints,” S&P wrote, noting that solid chemical products are generally easier to store or reroute than liquids, which require specialized infrastructure. The ratings firm said geographic diversification had become an important factor in companies’ credit resilience.

Paladin Energy faces an increasingly difficult path to its fiscal-year 2027 goals after first-quarter uranium output missed expectations. The Langer Heinrich mine in Namibia produced 1.0 million pounds of U3O8, 11% below Jefferies’s forecast, with production costs running 29% higher than the firm expected. Shares fell 6% to A$7.55, the lowest level since November. “Unchanged guidance requires a material 2H grade and recovery uplift, exposing FY27 earnings to delivery risk,” Jefferies analyst Daniel Roden said. Jefferies had maintained a “buy” call with an A$14.50 price target ahead of the operational update.

The Australian lithium sector showed continued volatility as spodumene prices fell 23% in the third quarter and weakened further in October. Morgans responded by cutting its 2027 spodumene price forecast by 16%, to US$1,725 per ton, and upgrading Mineral Resources to “buy” from “accumulate,” despite trimming the price target 8.5% to A$65.00 a share. “Diversification across mining services, iron ore and lithium better protects earnings and cash flow, with free cash flow yields positive across all our price scenarios,” Morgans analyst Annabelle Sleeman said. Mineral Resources ended Tuesday at A$45.81, down 38% since the start of June.

Bell Potter separately upgraded PLS Group to “buy” from “hold” after its share price approached a 12-month low. “At current lithium market prices, PLS will generate substantial earnings and cash flow with the restart of the 200,000 tons per annum Ngungaju processing plant,” Bell Potter analyst James Williamson said. PLS is also progressing development studies for two additional projects, P2000 and Colina, which Williamson described as growth options in markets underpinned by long-term demand for electric vehicles and battery storage. PLS shares ended Tuesday at A$3.08, down about 54% from their June high.