Gold Prices Surge Then Plummet Amid Interest Rate Cut Expectations

Gold prices rose sharply on September 3 after nearly ten days of weakness, but fell by up to Rs 1,170 on September 4 as fresh US economic data affected interest rate cut expectations.

Ajay Kedia, a commodity expert, said that Indian gold discounts widened sharply to USD 135 per ounce, the deepest discount in three months, amid weaker domestic demand and speculation about a potential government review of import duties.

The correction on September 4 was likely due to stronger US economic data reducing expectations of an early rate cut, as well as a stronger dollar and higher US bond yields putting pressure on gold.