Gold Prices Plummet to Five-Week Low Amid Rising Oil Costs and Hawkish Rate Hike Expectations
Gold prices declined sharply on September 15 due to increasing oil prices and a strengthening US dollar ahead of the Federal Reserve's two-day policy meeting. The spot gold price fell by 0.52 percent, hovering just above $4,276 per ounce, while US gold futures dropped 0.77 percent lower to $4,318 from its previous close.
Vedika Narvekar, a research analyst at Anand Rathi Share and Stock Brokers, noted that gold is now at a five-week low, down more than 3 percent this month alone. She attributed the decline to two major factors: rising oil prices due to Saudi Arabia's East-West pipeline shutdown following attacks, and the surge in 10-year US Treasury yields to 5.02 percent, its highest since 2007.
Narvekar predicted that gold will continue to face pressure with a hawkish Fed rate hike expected this week. She warned of a possible sharp relief rally if there is a dovish surprise from the Federal Reserve Chair, Warsh.