Global Gold Prices Surge as Rate Hike Fears Ease

Gold prices have dropped on India's Multi Commodity Exchange (MCX), but are rising globally due to eased expectations of a US Federal Reserve rate hike. On MCX, gold futures for October delivery fell by around 0.6% or Rs 945 per 10 grams to Rs 1,54,995 per 10 grams. In contrast, international markets saw spot gold rise 0.2% to $4,424.28 an ounce.

The US dollar has hovered near multi-month lows against major currencies, making dollar-priced gold cheaper for holders of other currencies. Economists polled by Reuters predict the US Fed will keep its key interest rate unchanged next month and through year-end, with a 65% chance of a hold following unexpected job losses in July.

The conflict's outbreak in February sent gold tumbling from a record $5,595 an ounce in January to below $4,000 in June. However, softer-than-expected US economic data last week raised hopes that the Federal Reserve will keep interest rates on hold this year, according to Reuters quoted IG market analyst Tony Sycamore.