Gold plunges 3.25% to $4,120 after hotter May CPI

Gold dropped $138.60, or 3.25%, to $4,120.10 per ounce on June 10 after the U.S. Bureau of Labor Statistics reported May consumer prices rose 4.2% year over year. The decline occurred as Treasury yields rose and markets reassessed the outlook for interest rates.

The May CPI report showed headline inflation up 0.5% month over month and 4.2% year over year. Energy accounted for most of the monthly gain: gasoline rose 7.0% in May and was 40.5% higher than a year earlier, contributing more than 60% of the monthly increase. Core CPI, which excludes food and energy, was 0.2% month over month and 2.9% year over year, with shelter adding 0.3 percentage point to the core monthly change.

Markets had already been adjusting after the May jobs report. Nonfarm payrolls rose by 172,000, roughly double the consensus estimate of 85,000. By June 10, futures tracked by CME FedWatch placed the probability of a December rate increase near 70%. The 10-year Treasury yield moved into the 4.53%–4.56% range and the U.S. Dollar Index was near 99.9. Higher yields and a firmer dollar increase the opportunity cost of holding non-yielding assets such as gold.

Escalation between Israel and Iran and reported U.S. naval activity near the Strait of Hormuz pushed oil toward the mid-$90s per barrel at one point. Higher oil prices fed into the energy component of CPI. Oil later fell about 3% after reports of halted attacks and diplomatic calls, while inflation readings and yields remained elevated.

Other precious metals fell on June 10. Silver weakened to $64.79 per ounce, with a session low at $63.27. Platinum declined 2.03% to $1,687, and palladium rose 0.25% to $1,217. Gold had traded near $4,330 on June 8 and lost roughly $210 per ounce across the multi-day period.

Market participants said silver’s larger drop reflected its higher sensitivity to macro shifts and its industrial demand profile. Central banks purchased a net 244 tonnes of gold in the first quarter of 2026. Analysts note structural silver deficits linked to solar panel manufacturing, electric vehicles and electronics, but those factors did not prevent near-term selling.

President Donald Trump asserted that Iran was “quickly becoming a failed nation” and criticized media coverage of U.S. naval actions. An account using the name Bull Theory posted that “Over $12.95 trillion has been wiped out from gold and silver in just 132 days,” and provided figures for recent losses in both metals.

Traders will watch the May producer price index due June 11, upcoming Federal Reserve speakers and any further developments in the Iran-Israel exchanges for signals on whether gold can hold the $4,000 level.