Gold Prices Plummet Amid Fed Rate Hike Fears and Soaring Crude Oil Costs
New Delhi: The price of gold has dropped by almost 2% on a weekly basis due to rising expectations of a Federal Reserve rate hike and increased crude oil prices. On Friday, MCX gold futures expiring in October declined 0.08%, while MCX silver futures (September) shed 0.04%. The price of gold stood at Rs 1,52,655, while silver was at Rs 2,34,886 per kg on the commodity exchange.
The escalation of US-Iran tensions and attacks on shipping routes have raised supply-risk concerns, pushing WTI crude above $104 a barrel. This has led to heightened inflation concerns, increasing expectations of a Federal Reserve rate hike sharply higher. The resulting pressure on precious metals drove gold and silver to their third consecutive weekly declines, although both staged a notable rebound on Friday despite the hotter headline inflation reading.
The August CPI report showed headline inflation up 0.4% month-on-month and 3.4% year-on-year, with energy prices again providing a significant push. US diesel prices also climbed above $6 a gallon for the first time, underscoring the growing inflationary impact of higher energy costs.