Indian Gold Rate Plummets ₹200-230 per Gram Amid Federal Reserve Hawkishness

The Indian gold rate plummeted to ₹15,677 per gram on September 1, marking its sharpest single-day decline in months. This sudden drop was triggered by Federal Reserve Chair Kevin Warsh's hawkish address at Jackson Hole on Friday, warning that inflation is not easing fast enough and that the Fed would have 'work to do' before considering any rate pivot.

The gold price had been climbing steadily throughout August, reaching ₹15,905 per gram in Delhi and above ₹15,875 in other major cities. However, with Warsh's comments sending shockwaves through international markets, the Indian rupee weakened against the dollar, causing the gold price to plummet by roughly ₹200-230 per gram.

This correction is significant not only because of its magnitude but also due to the timing. The festive season in India is about to kick off, with Ganesh Chaturthi, Navratri, Dhanteras, and Diwali all taking place within the next few weeks. Jewellers are bracing themselves for a surge in demand, which could quickly reverse the price decline.

The World Gold Council has maintained its outlook that Indian demand will remain robust in the second half of 2026, driven by rural income recovery, strong wedding season bookings, and sustained investment demand from households using gold as an inflation hedge. However, this correction adds a wrinkle to the Nifty Consumer Durables index, which gained through August on strengthening festive season demand outlook.