Oil Price Spike Sends Gold and Silver Prices Plummeting on MCX
Gold and silver prices fell on the Multi Commodity Exchange (MCX) due to profit-booking amid rising oil prices, which stoked fears of rate hikes by major central banks globally.
The MCX gold October futures dropped 0.55% to ₹1,55,090 per 10 grams, while MCX silver September contracts fell 1% to ₹2,35,655 per kg around 9:25 AM on Tuesday, August 18.
The rising oil prices are attributed to the stalled US-Iran talks and concerns about potential disruptions to energy supplies through the Strait of Hormuz. Brent crude traded above $91 per barrel, contributing to higher inflation risks and potential rate hikes by the US Federal Reserve.
Gold is considered a hedge against inflation, but higher interest rates tend to weigh on gold prices as it is a non-yielding asset. Investors are now awaiting the minutes of the Fed's July policy meeting, due to be released on Wednesday, which could influence market expectations about rate hikes.