Gold Prices Soar as Oil Falls and Dollar Debasement Concerns Rise
Gold prices in India rose sharply on Thursday after the US Fed's rate cut bets fell due to falling oil prices. The MCX silver futures for September 2026 delivery increased by Rs 3,400 to Rs 2,42,999 per kg, while gold futures for October 2026 delivery rose by Rs 1,285 to Rs 1,60,898 per 10 grams.
The US Treasury's announcement of an expansion in purchases of older long-dated bonds last week fueled concerns about dollar debasement, leading to a surge in demand for gold. International gold gained more than 5% last week due to this move.
Markets are pricing in a 36.5% probability of a US rate hike in September and a 72.7% chance of a hike by December, according to the CME FedWatch Tool. However, oil prices slipped on Thursday, extending a run of losses, as hopes of a reopening of the key Strait of Hormuz grew amid diplomatic efforts involving Iran and Qatar.