Gold Prices Plummet on Changing Interest Rate Expectations

Gold and silver prices have taken a hit due to changing expectations around US interest rates, rising oil prices, and fresh geopolitical tensions. At the time of writing, gold was priced at Rs 1,55,470, down 0.30%, while silver was trading at Rs 2,35,763, down 0.96%.

According to Dr Renisha Chainani, Chief Research Officer at Augmont, 'Gold and silver came under pressure as fears of a US interest rate hike next month eased.'

The market pricing for a 25-basis-point rate hike in September has shifted towards a nearly 65% probability of the Fed keeping rates unchanged. Elevated energy prices remain a watch point, as they tend to stoke inflation concerns and firm up expectations of higher rates from the Fed.

However, geopolitical tensions could provide some support to gold. Gold is often seen as a safe-haven asset, and when uncertainty rises, investors tend to increase their exposure to gold to protect their portfolios from sudden market shocks.