Gold Prices Plummet Below ₹1.51 Lakh in India Amid Stronger US Dollar and Higher Bond Yields
Gold prices in India extended their fall on September 2, dropping below ₹1.51 lakh per 10 grams as of 10:02 am on the MCX. The decline comes amid a stronger US dollar and higher bond yields, which have reduced the appeal of non-yielding assets like gold.
The October gold futures were trading at ₹1.50 lakh per 10 grams, down 1.06%, while September silver futures were at ₹2.32 lakh per kg, lower by 1.38%. The decline in gold prices is largely linked to changing expectations around US interest rates, with markets now pricing in a 68% probability of a Federal Reserve rate hike this month.
Gaurav Garg, Head of Research at Lemonn Markets Desk, said rising US Treasury yields and a stronger dollar had reduced demand for precious metals. Prithviraj Kothari, Managing Director at RiddiSiddhi Bullions, added that gold dropped to a three-week low due to escalating U.S.-Iran tensions pushing oil prices higher.
Despite the current weakness, Piyush Jhunjhunwala, Founder & CEO of Stockify, said gold is facing near-term pressure from rising crude oil prices and US Treasury yields. However, inflation concerns and geopolitical tensions could continue to provide longer-term support to the metal.