MCX Gold Crashes Over Rs 10,700 as Rate Hike Fears Grip Markets

Gold prices continued their downward trend on September 1, plummeting over Rs 10,700 from its peak of Rs 1,63,229 per 10 grams on August 24. According to data, MCX futures gold fell to Rs 1,52,514 per 10 grams, while COMEX gold declined from just above $4,734 per ounce to around $4,420.

The sharp decline in gold prices can be attributed to the cautious sentiment among investors due to the Federal Reserve's rate hike outlook. Higher US yields and a firmer dollar are making it challenging for gold to find buying support, according to Vedika Narvekar, Research Analyst - Commodities & Currencies at Anand Rathi Share and Stock Brokers.

Narveker also noted that the recent escalation in tensions between the US and Iran has added to inflation concerns, making the rate outlook even more important for gold. The current market sentiment remains cautious, with many analysts predicting a September Fed rate hike.