Kitco watchlist jolted as PPI surprise hits rates, dollar and precious metals

The kitco screens lit up Friday after a hotter-than-expected PPI print reinforced the “higher-for-longer” inflation fear that has been stalking markets all month. The Producer Price Index report for December 2025 arrived at 8:30 a.m. ET on Jan. 30, 2026, and traders immediately treated it as a warning that sticky services inflation could keep U.S. interest rates restrictive longer than hoped—pushing the dollar and yields higher and weighing on gold and silver.

The PPI release landed into an already-volatile session for metals, with investors also digesting a surprise Federal Reserve leadership signal from the White House. Together, the combination flipped the tone from “safe-haven bid” to “real-yield pressure” in a matter of hours.

PPI comes in hot on services and margins

Wholesale inflation rose faster than markets had penciled in. The Bureau of Labor Statistics said the Producer Price Index for final demand increased 0.5% in December (seasonally adjusted), after 0.2% in November and 0.1% in October. The index rose 3.0% over 2025 on an unadjusted basis.

The details mattered:

• Final demand services jumped 0.7%, the largest increase since July, and final demand goods were unchanged.

• A large share of the services rise was tied to trade services margins, with final demand trade services margins up 1.7%.

• The “cleaner” inflation gauge inside the report—final demand less foods, energy, and trade services—rose 0.4% in December, marking an eighth straight monthly increase.

The BLS also noted the report timing itself was unusual: a federal government shutdown in October and November delayed survey operations and pushed the December PPI release to late January.

What Kitco traders saw in real time

For many retail and professional traders, Kitco is where the whiplash showed up fastest: spot quotes ticking lower as rate expectations firmed, and volatility ripping through intraday ranges that had already been stretched by January’s record-setting run.

By early afternoon in New York, spot gold was trading near $4,900 per ounce after a drop of roughly 9% on the day, while silver was down more than 20%, hovering around $90—a violent reversal after both metals hit fresh all-time highs earlier in the week. The key mechanism was simple: warmer producer inflation tends to lift the dollar and Treasury yields, raising the opportunity cost of holding non-yielding metals.

Markets re-price the rate path

The PPI report added fuel to an inflation narrative that has been building through January: goods inflation has cooled in pockets, but services—and the margins embedded in services—remain stubborn. Investors often watch PPI because parts of it feed into the Federal Reserve’s preferred inflation gauges, and because it can hint at whether firms are successfully passing costs through.

Friday’s data strengthened the case that near-term disinflation may be uneven. The immediate market behavior reflected that shift:

• Treasury yields rose as traders priced a firmer policy path.

• The U.S. dollar strengthened, pressuring commodities priced in dollars.

• Risk assets wobbled as investors weighed higher discount rates against earnings momentum.

Fed leadership news adds a second shock

Metals selling accelerated after President Donald Trump said he intends to nominate Kevin Warsh to succeed Jerome Powell as Federal Reserve chair when Powell’s term ends in May. The market reaction suggested investors viewed the development as another reason to expect a more hawkish policy stance—or at least less appetite for rapid easing—at a moment when inflation surprises are already complicating the outlook.

For gold and silver, the timing was brutal: prices had rallied hard into late January on safe-haven demand and momentum. When rates and the dollar moved against them at the same time as leadership uncertainty rose, the result was a fast “crowded trade” unwind.

Key numbers investors are watching now

What comes next: the next PPI and the “carry” question for gold

The next major checkpoint is already on the calendar: the January 2026 PPI is scheduled for Friday, Feb. 27, 2026, at 8:30 a.m. ET. Between now and then, metals traders will watch whether Friday’s plunge stabilizes into a new trading range or continues lower as positioning clears.

The near-term test for gold is whether it can hold support while the market debates two competing forces: elevated geopolitical demand for hedges versus the drag from higher real yields and a stronger dollar. If rate expectations keep grinding higher, gold’s carry disadvantage becomes harder to ignore. If inflation data cools quickly or risk sentiment breaks, the safe-haven bid can reassert itself—often abruptly.

Sources consulted: U.S. Bureau of Labor Statistics; Reuters; Associated Press; Barron’s; TIME Magazine; Kitco News