Gold Prices Plummet as Rate Hike Expectations Soar
Gold and silver prices plummeted on Monday as expectations of a US Federal Reserve rate hike grew, prompting investors to reassess their holdings. The MCX silver futures for September 2026 delivery fell by Rs 3,635 to Rs 2,38,809 per kg, while gold futures for October 2026 delivery dropped by Rs 2,700 to Rs 1,53,640 per 10 grams.
The price of gold has tanked Rs 9,500 in just four days, and silver is down Rs 7,700 in three sessions. This decline comes as the US central bank is expected to raise interest rates to combat inflation, a move that would make holding non-yielding assets like gold less attractive.
According to the CME FedWatch tool, markets are now pricing in a 57% chance of a rate hike at the Fed's September meeting, up from 30% before US Federal Reserve Chair Kevin Warsh's comments. Higher interest rates tend to weigh on gold prices, and investors will be closely watching upcoming labour market data for clues about future monetary policy.