Gold Tumbles Rs 500 as Oil Prices Surge and Dollar Strengthens
Gold prices in India plummeted by Rs 500 on Monday due to a global market sell-off, a sharp increase in crude oil prices, and a strong US dollar. This comes as investors worldwide are pricing in a probable Federal Reserve rate hike.
The spot gold price declined by 1.3% globally, reaching USD 4,291.71 per ounce, while silver tumbled nearly 3% to USD 62.82. The yellow metal of 99.9% purity dropped to Rs 1,55,400 per 10 gram in the national capital.
The price drop is attributed to higher oil prices, which have reached a four-month high of USD 103 a barrel following drone attacks on Saudi Arabia's East-West pipeline. This has added to inflation worries and put further pressure on demand for gold and silver.
Despite current pressures, the Australia and New Zealand Banking Group (ANZ) maintains a 12-month gold price target of USD 5,400 an ounce. The bank cites recovering ETF holdings and institutional demand in China as factors supporting investment demand for the metal.