Gold Prices Tumble Amid Hawkish Fed Speech and Stronger Than Expected Inflation
Gold prices declined nearly 2% as markets digested higher-than-expected inflation data and a hawkish speech by US Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium. The MCX gold futures expiring in October dropped 1.63%, while MCX silver futures for September shed 1.66%. Gold futures stood at Rs 156,400, while silver futures stood at Rs 236,651 per kg.
The price of 10 grams of 24-carat gold was at Rs 159,578 on Friday, down from Rs 162,603 seen on Monday at market opening. The renewed concerns about currency debasement and US Treasury support for long-dated bonds had caused the bullion rally to multi-month highs earlier in the week.
However, stronger-than-expected economic data led to market pricing in a higher probability of the Fed remaining restrictive for longer. A hawkish speech from Kevin Warsh reset rate expectations, while oil eased from recent highs on fresh signs of diplomatic progress around the Strait of Hormuz.