Gold Prices Plummet in Kerala as Crude Oil Rises

The price of gold has plummeted in Kerala as global crude oil prices continue to rise. This has reignited inflation fears and is fueling expectations that the US Federal Reserve will maintain higher interest rates for longer. The price of 22-carat gold in Kerala fell by Rs 230 per gram, bringing down the price of a sovereign by Rs 1,840.

A sovereign of gold now costs Rs 1,10,120. This decline comes on the heels of rising oil prices, with Brent crude rising nearly 2% to $106.50 a barrel. The rise in oil prices has renewed concerns over inflation and could make it more difficult for the Federal Reserve to ease monetary policy.

Higher interest rates generally weigh on gold as the non-yielding asset becomes less attractive compared with interest-bearing investments. The US Federal Reserve had raised its policy rate by 25 basis points to a range of 3.75% to 4% earlier this month.