Gold Prices Plummet as Crude Oil Soars Past $107
Global gold prices plummeted $28.50 per ounce to $4,292.50 on Monday, marking a sharp decline from Friday's close. This downward correction is largely attributed to rising energy costs and expectations of aggressive monetary tightening by the Federal Reserve in its upcoming September meeting.
The price of WTI crude oil surged over 2% past $107 a barrel due to supply shocks in the Middle East, including Houthi strikes on Saudi Arabia and tanker incidents in the Gulf. This inflation pressure, combined with hotter-than-expected economic prints, has pushed trader odds for a rate hike at the September meeting to 86% to 88%. As a result, non-yielding bullion like gold faced significant selling pressure.
The domestic markets also reflected this global sell-off, with MCX Gold Futures plummeting to ₹1,50,810 per 10 grams, logging an absolute drop of ₹1,974 per 10 grams compared to the previous Friday's close. MCX Silver Futures also declined sharply, trading down at ₹2,32,150 per kilogram.