Gold and Silver Prices Plummet Amid Hawkish Fed Comments
New Delhi: Gold and silver prices plummeted on Monday, August 31, as investors booked profits amid weak global cues. The Multi Commodity Exchange (MCX) saw gold October futures drop over Rs 2,600 to hit Rs 1,53,640 per 10 grams in early deals. Silver September futures contracted by more than Rs 4,200 to Rs 2,32,501 per kg.
The decline mirrored weakness in the international bullion market following US Federal Reserve Chair Kevin Warsh's hawkish comments at the Jackson Hole Economic Policy Symposium. US gold futures for December have fallen about 4% over the last two sessions to around $4,477 per troy ounce.
Warsh indicated that the Federal Reserve could raise interest rates again, possibly as early as September, if inflation fails to move convincingly towards its 2% target. This change in expectations has increased market expectations of higher interest rates, which is negative for gold and silver.