Gold Tumbles as US Inflation Fuels Rate Hike Fears

Global gold prices declined on Monday following higher-than-expected US inflation data, which increased the likelihood of a Federal Reserve interest rate hike.

The US core consumer price index surged 0.3% in August from a month earlier, with underlying inflation edging up. This raised concerns about a potential Fed rate hike and weighed on gold prices.

MCX gold futures expiring October stood at Rs 1,52,655, while MCX silver futures for September delivery were at Rs 2,34,886 per kg. Spot gold was near $4,340 an ounce, falling nearly 0.2% on the day and off 1.8% for the week.

Fears of disruption in shipping lanes due to drone attacks also contributed to the decline in gold prices. Traders are pricing in a nearly 88% chance of a Fed rate hike in September, marking the institution's first rate hike in three years.