Gold Prices Plummet as US Inflation Data Triggers Rate Hike Fears
Gold prices fell on Monday as higher-than-expected US inflation data boosted expectations of a Federal Reserve rate hike. The MCX gold futures expiring October dropped to Rs 1,52,655 per kg, while MCX silver futures for September delivery fell to Rs 2,34,886 per kg.
Spot gold prices stood at $4,340 an ounce, down nearly 0.2% on the day and off 1.8% for the week. Silver also declined by nearly 0.8% to $64 an ounce, while platinum and palladium prices decreased as well.
The US inflation data showed that core consumer price index, which excludes food and energy costs, surged 0.3% from a month earlier. This heightened inflation concerns due to the crude oil price rally increased expectations of a Federal Reserve rate hike, weighing on gold and silver prices.
Traders are pricing in nearly 88% chance of a Fed rate hike in September, marking the institution's first rate hike in three years.