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Gold Prices Tumble Amid Fed Rate Hikes
18 Sep
Summary
- US inflation prompted the Federal Reserve to raise interest rates by 25 basis points.
- Gold and silver prices declined significantly on September 17 due to these factors.
- Geopolitical tensions and a stronger US dollar also pressured bullion values.
Precious metal prices experienced a significant downturn on September 17, impacted by rising inflation in the United States and subsequent interest rate hikes by the Federal Reserve. The Federal Reserve's decision to increase rates by 25 basis points put immense pressure on gold and silver.
On MCX, gold futures for October 5 delivery fell nearly Rs 2,000 from the previous closing price. Silver futures for December 4 delivery also saw a substantial decline in early trade. This volatility extended to the physical gold market, with prices for 24, 22, and 18-carat gold showing marked decreases.
International spot gold prices also remained under pressure, falling 1.2% to USD 4,240.1 per ounce. A stronger US dollar makes gold more expensive for buyers using other currencies, contributing to the price drop. While geopolitical tensions and the festive season in India usually support demand for safe-haven assets, current market dynamics are heavily influenced by global interest rate expectations and currency movements.
