Precious metals prices tumbled early Wednesday after consumer inflation data came in higher than expected, with gold and silver nearing their lowest prices in about two-and-a-half months as analysts say the odds of another Federal Reserve interest rate hike are up.

Gold futures are down 1.6% to a price of $4,111.00 as of 10 a.m. EDT, while spot gold fell 1.5% to a price of $4,093.84.

Silver slid even more dramatically: Silver futures are trading at $56.42, down 5.2%, and spot silver is priced at $56.28, down more than 5.3%, as of 10 a.m. EDT.

Silver hit its lowest price since late July, while gold is also hovering around a two-and-a-half month low, aside from a brief dip last week that sent gold futures under $4,100.

Ole S. Hansen, head of commodity strategy at Saxo Bank, said early Wednesday metals are now “under pressure” following an uptick in inflation, which he says has “increased speculation that the Fed could raise rates as early as its 28 October meeting.”

Also putting downward pressure on precious metals prices is the strength of the U.S. dollar, which is up nearly 0.7% on Wednesday and is hovering around an 18-month high.

Inflation heated up in September, as the Bureau of Labor Statistics’ Consumer Price Index rose 0.6% for the month and 3.7% annually, the latter figure coming in above expectations of 3.6%. The core CPI index, excluding food and energy prices, rose 0.3% for the month and 2.6% over 12 months, higher than the expected 0.2% and 2.5%, respectively. Energy prices accounted for much of the CPI increase, with gas prices surging 9.1% in September and 34.2% over the past year.

53.7%. That’s the probability of an interest rate hike at the Federal Reserve’s Oct. 28 meeting as of Wednesday morning, according to CME Group’s FedWatch tool. The probability surged after inflation data was released earlier in the day. Reuters reported earlier Wednesday, before inflation data came out, that the likelihood of a rate hike in October was just 22%. Hansen said Wednesday morning an October rate hike would likely be “highly controversial,” considering the meeting’s proximity to the midterm elections and “political sensitivity surrounding monetary policy.” The Fed, though, may “increasingly find itself caught between defending its inflation-fighting credibility and avoiding accusations of political interference,” Hansen said.

Federal Reserve chair Kevin Warsh is slated to speak this Friday at meetings hosted by the International Monetary Fund and the World Bank in Bangkok, Thailand. Warsh is scheduled to participate in a conversation with the IMF’s managing director Kristalina Georgieva.

Gold and silver prices are well below the all-time peaks both metals hit in January. At the time, silver hit a price above $120 while gold surged to a record $5,600, buoyed by factors including interest rate cuts, demand for metals from technological industries and growing international tensions.

Annual Inflation Rate Hits 3.7% After Consumer Prices Rose 0.6% In September (Forbes)