Gold Prices Plummet Amid Tightening Monetary Policy Expectations

Gold prices plummeted by 1.71% to settle at Rs156,281 as traders' expectations of an impending Federal Reserve rate hike intensified following Chair Kevin Warsh's comments on persistent inflationary pressure.

Warsh emphasized that inflation has not meaningfully slowed and reiterated the Fed's focus on bringing PCE inflation back to its 2% target, which increased expectations of tighter monetary policy and weighed on gold.

The physical demand for gold weakened, particularly in India, where gold discounts widened sharply to $135 per ounce over official domestic prices, compared with $65 last week, marking the deepest discount in three months.