India Gold Prices Drop 3% Amid Rising Inflation Concerns

Gold prices in India dropped nearly 3% on a weekly basis due to expectations of a US Federal Reserve rate hike. This is according to data published by the India Bullion and Jewellers Association (IBJA), which showed that the price of 10 grams of 24-carat gold stood at Rs 1,54,884 on Friday.

The price drop was attributed to the escalation in the US-Iran conflict, including Iran's retaliatory attack on Kuwait following renewed US strikes on Iranian rocket launchers near the Strait of Hormuz. This surge in crude oil prices raised inflation concerns and pushed expectations of a September Federal Reserve rate hike sharply higher.

The market mood shifted again during the middle of the week after weaker-than-expected US labour-market data and dovish Federal Reserve commentary revived expectations of a less aggressive monetary-policy stance. However, this rebound was short-lived after Friday's August US employment report significantly exceeded expectations.