Gold Price Plunges Over $100 From Weekly Peak Amid Fed Rate Hike Fears

Gold and silver prices plummeted on Friday, ending a volatile week on a weak note. International spot gold fell to $4,567.23 per ounce, its lowest level since August 20, after reaching a three-month high of $4,696.18 on Tuesday.

This decline represents a drop of about $129 per ounce from the weekly peak and marks a 2.9% fall for the week in gold prices. US gold futures also settled 2.9% lower at $4,529.90 per ounce.

Silver witnessed even sharper selling pressure, with international spot silver falling 3.5% to $66.81 per ounce on Friday. Domestic gold and silver prices in India also corrected sharply, with retail silver prices plummeting by ₹18,000 per kg from ₹2.60 lakh per kg to ₹2.42 lakh per kg.

The sharp declines can be attributed to several factors, including Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium, which sparked an increase in the probability of a September rate hike to 58%. The stronger US dollar and higher yields also contributed to the sell-off, making bullion more expensive for buyers using other currencies.

The correction in domestic silver was particularly sharp, with prices falling by ₹18,000 per kg. However, the IBJA 999-silver benchmark closed at ₹2,43,892 per kg on August 28, highlighting the difference between retail market quotations and benchmark bullion prices.