Gold Prices Plummet to New Lows Amid Rising US Interest Rates

Gold prices have been on a downward spiral since their record highs in January of this year. The popular safe-haven asset has crashed due to several factors, including profit booking at higher levels and the US-Iran war sending crude oil prices above $120 per barrel.

The US Federal Reserve's decision to hike rates for the first time since 2023 has also led to a strengthening of the US Dollar Index by over 3% year-to-date. This has made investing in US bonds more attractive, making gold, a non-interest-yielding asset, less appealing.

Experts predict that if the US inflation remains high, another sharp decline in gold prices may be on the horizon. The worst may not be over yet, and some analysts see gold falling to Rs 134,000 or even Rs 1 lakh per 10 grams level.