Gold Prices Plunge as Hawkish Fed, Rising Oil Fuel Interest Rate Hike Fears

Gold prices in India have declined for the fourth consecutive session, dropping by Rs 1,500 per 10 grams to Rs 160,900. This decline is attributed to hawkish statements from the Federal Reserve and escalating oil prices, which are fueling market expectations of an imminent interest rate hike.

The bearish global cues have weighed on traders' sentiment, with profit-booking continuing after gold's strong run in recent weeks. According to Gaurav Garg, head of research at Lemonn Markets Desk, 'Gold prices remained under pressure after Federal Reserve Chair Kevin Warsh's hawkish speech at the Jackson Hole Symposium increased expectations of an interest rate hike in September meeting.'

The rise in US Treasury yields and the elevated dollar have further pressured precious metals, extending their recent correction. Additionally, the escalation of oil prices following US-Iran military strikes is adding to inflation concerns and potentially strengthening the case for tighter monetary policy.