Oil Price Surge Fuels Rate Hike Bets, Gold and Silver Prices Drop on MCX

The prices of gold and silver on MCX dropped on Wednesday as rising oil prices fueled bets on a US Federal Reserve interest rate hike. The elevated crude oil price, amid stalled US-Iran talks, has heightened inflation concerns and bolstered the case for higher interest rates.

MCX gold October futures were down 0.03% at ₹1,54,215 per 10 grams, while MCX silver September futures fell by 0.93% to ₹2,30,250 per kg around 9:10 AM.

The dollar index eased to 99.57 from 99.66 in the earlier session, making gold slightly cheaper for buyers in overseas currencies.

The Fed's next policy meeting is on September 15-16, and markets are currently pricing in a 65% probability that the Fed will keep rates unchanged and a 35% chance of a rate hike.