India Gold Prices Dip 3% as US Fed Rate Hike Expectations Rise

Gold prices in India dipped nearly 3% on a weekly basis due to expectations of a US Federal Reserve rate hike. The repricing of US monetary policy and a surge in crude oil prices, which raised inflation concerns, also contributed to the decline.

The price of gold futures (October) on the Multi Commodity Exchange (MCX) rose by 0.03% on Friday, while silver futures (September) shed 0.07%. The current price of 10 grams of 24-carat gold is at Rs 1,54,884, down from Rs 1,59,578 seen last week.

The sharp correction in precious metals was due to rising Treasury yields and a stronger dollar, which outweighed safe-haven demand. The heightened inflation concerns due to crude oil price rally pushed expectations of a September Federal Reserve rate hike sharply higher.