US Fed Rate Hike Expectations Spark Gold, Silver Plunge
Gold and silver prices plummeted to seven-week lows on Monday due to stalled US-Iran negotiations, a strengthening US dollar, and higher crude oil prices. The latter raised expectations for further interest rate hikes by the US Federal Reserve.
The gold price dropped from $4260 per ounce in the previous session to a low of $4150, while silver fell from $64 per ounce to $61. In India, gold was trading at Rs 1,50,000 per 10 gm and silver at Rs 2,28,000 per kg.
Ajay Kedia, MD of Kedia Commodities, stated that the stalled US-Iran negotiations kept oil prices elevated, strengthening expectations for further Federal Reserve tightening. The Brent crude price jumped to $107.20 per barrel on Monday due to this development.
Kedia is optimistic about the medium-to-long-term prospects of gold and silver, predicting that by the end of 2026, gold prices may reach $4850 and silver at $70. However, in the near term, if tensions persist, gold prices could drop to $4000 levels, and silver to $58.50.