Gold Prices Plummet Amid Rising Oil Costs and Strong Dollar
New Delhi - The price of gold in India's national capital dropped by Rs 500 to Rs 1,55,400 per 10 grams on Monday as global markets saw a sell-off amid rising crude oil prices and a strong US dollar.
The drop was despite the fact that silver bucked the trend and held steady at Rs 2,34,600 per kilogram, according to local traders. Globally, spot gold declined by 1.3% to USD 4,291.71 per ounce, while silver tumbled nearly 3% to USD 62.82.
Akshat Siddhant, Lead Quant Analyst at investment platform Mudrex, attributed the decline in gold prices to investors pricing in a probable Fed rate hike and higher oil prices adding to inflation worries. He noted that crude oil surged to USD 103 a barrel, a fresh four-month high, after Saudi Arabia shut its East-West pipeline following drone attacks.
The bank ANZ forecasts three 25-basis-point Federal Reserve rate increases by March 2027 due to geopolitical developments in West Asia and elevated energy costs. However, ANZ also noted that persistent geopolitical uncertainty could strengthen gold's safe-haven appeal. The bank retained its 12-month gold price target of USD 5,400 an ounce, citing recovering gold-backed ETF holdings and speculative positions.