Gold Prices Plunge to Three-Week Low on Rising Interest Rate Hopes
MCX gold prices have fallen to their lowest level in over three weeks after breaking below ₹1.50 lakh per 10 grams. This marks the seventh consecutive session of losses for the precious metal, with a decline of 1.3% or ₹2,064 per 10 grams on Wednesday.
The fall in gold prices can be attributed to renewed tensions in the Middle East, which have pushed crude oil prices higher and stoked inflation concerns. This has boosted expectations of a US Federal Reserve interest-rate hike, making the non-yielding safe-haven asset less attractive.
A stronger US dollar also contributed to the decline in gold prices, as it makes greenback-priced bullion more expensive for overseas buyers. Market participants are increasingly pricing in the impact of a tighter rate outlook, keeping pressure on gold.
According to Jateen Trivedi, VP of Research Analyst, Commodity and Currency at LKP Securities, gold prices remain under pressure amid a stronger dollar and rising bond yields. He expects the gold range to be between ₹1,48,000 and ₹152,500.