Gold Price Drops Amid Stronger Dollar and Fed Rate Hike Expectations
The price of gold on the Multi Commodity Exchange (MCX) fell by 0.48% to Rs. 1,41,800 per 10 grams due to a stronger dollar and profit-taking in precious metals. The dollar index hovered near 101.5 ahead of the US Federal Reserve's monetary policy decision on July 29.
August gold futures declined as traders awaited the Fed's move, which is expected to have a significant impact on global markets. According to the CME FedWatch Tool, there is an 81% chance of a September rate hike by the US Federal Reserve.
Domestically, 24K gold fell by Rs. 169 to Rs. 1,44,170 per 10 grams, while 22K gold declined by Rs. 155 to Rs. 1,32,150. The prices of gold in major cities like Mumbai, Kolkata, Delhi, and Chennai mirrored the MCX prices.
Ilya Spivak, Head of Global Macro at Tastylive, noted that the market is waiting for Fed signals and that if the meeting includes language setting the groundwork for a rate hike in September, gold may rally above $4,200 per ounce.