Gold Prices Crash Amid Crude Oil Surge, Rate Hike Expectations

Gold and silver prices plummeted on Monday due to rising crude oil prices, higher bond yields, and expectations of another US Federal Reserve rate hike. On the MCX, silver futures for September 2026 delivery declined by Rs 6,661 to Rs 2,28,035 per kg, while gold futures for October 2026 delivery fell by Rs 3,214 to Rs 1,47,667 per 10 grams.

The sharp decline in precious metal prices is attributed to the increased inflation risks fueled by high crude oil prices. The uncertainty over global supply has strengthened expectations of tighter monetary policy and further interest rate hikes by the US Federal Reserve.

Additionally, rising bond yields have made interest-bearing assets more attractive compared to gold, which does not generate interest. Markets are closely tracking expectations of another rate hike by the US Federal Reserve, with a 68.1% probability of a 25-basis-point hike at the Fed's October-end meeting.

The outlook for gold and silver prices is likely to remain sensitive to movements in crude oil, bond yields, and the US dollar. A shift towards lower interest rates could support gold, but persistent inflation concerns and expectations of further rate hikes may keep prices under pressure.