Gold Loses Its Shine For The Week, Prices Fall 2% As Fed Rate Hike Fears Grow
New Delhi: Gold prices declined nearly 2% this week as surging crude oil, stubborn US inflation and growing expectations of a Federal Reserve rate hike reduced investor appetite for precious metals. On Friday, MCX gold futures for October slipped 0.08% to ₹1,52,655, while September silver futures declined 0.04% to ₹2,34,886 per kg. According to India Bullion and Jewellers Association data,…
Gold prices experienced a significant drop of nearly 2% during the course of the week due to several factors. Rising crude oil prices, persistent US inflation, and the likelihood of a Federal Reserve rate hike all contributed to a decrease in investor confidence in precious metals. On Friday, MCX gold futures for October saw a decline of 0.08%, settling at ₹1,52,655, while September silver futures experienced a marginal drop of 0.04%, closing at ₹2,34,886 per kg.
India Bullion and Jewellers Association data indicated that 24-carat gold was valued at ₹1,51,938 per 10 grams on Friday, which was lower than the previous week's price of ₹1,54,884.
The recent surge in crude oil prices, fueled by escalating tensions between the United States and Iran, as well as concerns over shipping routes, pushed West Texas Intermediate (WTI) crude oil above $104 per barrel. Oil prices surged by 9.6% over five sessions and nearly 16% over the past month. The sharp increase in energy costs has raised concerns that inflation could remain elevated and force the US Federal Reserve to maintain a tighter monetary policy.
As a result, gold and silver prices recorded their third consecutive weekly decline. However, both precious metals managed to recover some ground on Friday.
US headline inflation increased by 0.4% month-on-month and 3.4% year-on-year in August, with energy costs playing a significant role in the rise. Producer inflation also accelerated to 5.4% annually, slightly exceeding expectations. The anticipation of a rate increase at the Federal Open Market Committee meeting scheduled for September 15-16 grew above 70%, as per market participants.
Additionally, US Treasury yields surged sharply higher, with the 10-year yield touching 4.975% intraday, while the two-year yield approached 4.65%.
Analysts project that Comex gold will face resistance around $4,500-$4,530, while support could be found at $4,340-$4,370. For MCX gold, resistance is expected at ₹1,54,000-₹1,54,700, with immediate support provided by the ₹1,50,000-₹1,50,700 range. The movements in crude oil, US inflation, and the upcoming Federal Reserve decision are anticipated to remain key factors influencing bullion prices.
Written by urgent.news from Free Press Journal's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
