Gold and silver prices have seen a sharp decline following signals of an interest rate hike by the US Fed. Both precious metals are trading in the red in domestic futures and spot markets.
The main reason for this decline is the growing expectation of an interest rate hike by the US Federal Reserve in its upcoming September meeting.
According to data from Good Returns, at 9:50 AM on Monday, the price of 24-carat gold in Delhi saw a major drop of ₹1470. Following this, the price of 10 grams of gold came down to ₹1,56,920.
Similarly, the rate of 22-carat gold fell by ₹1350 to ₹1,43,850 per 10 grams. Meanwhile, the price of 18-carat gold was trading at ₹1,18,000 per 10 grams, down by ₹830.
A downward trend in gold prices was also observed in other major cities of the country. Let's look at the rates in some key cities.
In Delhi and Jaipur, the price of 24-carat gold was ₹1,56,920, 22-carat was ₹1,43,850, and 18-carat was ₹1,18,000 per 10 grams.
In Mumbai and Kolkata, 24-carat gold was sold at ₹1,56,770, 22-carat gold at ₹1,43,700, and 18-carat gold at ₹1,17,850 per 10 grams.
In Chennai, the rate for 24-carat gold was ₹1,56,770, 22-carat was ₹1,43,700, and 18-carat was ₹1,21,400. In Bengaluru, the prices for 24 and 22-carat were the same, while 18-carat was priced at ₹1,17,850.
In Ahmedabad, the price of 24-carat gold was recorded at ₹1,56,820, 22-carat at ₹1,43,750, and 18-carat at ₹1,17,900 per 10 grams.
A sharp decline in the prices of gold and silver was also recorded on the domestic futures market (MCX).
On the MCX exchange, at 9:36 AM, the gold futures contract for October 5 expiry was trading at ₹1,54,115 per 10 grams, down by 1.39% or ₹2166.
Like gold, silver also saw a decline. The silver futures contract for December 4 expiry was trading at ₹2,39,490 per kg on the MCX at 9:40 AM, down by 1.22% or ₹2954.
International cues are behind this fall in precious metals. The possibility of an interest rate hike in the US has made the dollar and bond yields attractive, increasing pressure on non-interest-bearing assets like gold and silver.
According to Ajay Kedia, MD of Kedia Advisory, expectations of an interest rate hike in the Fed's September meeting in the US have intensified. After the Jackson Hole speech by US Federal Reserve Chairman Kevin Warsh, bets on a rate hike have increased significantly.
Gold and silver were also trading in the red in the international market.
On Comex, the price of gold fell by 1.21% or $54.60 to $4,475.30 per ounce. Meanwhile, Gold Spot was down by 0.84% or $37.27 to $4,417.84 per ounce.
On Comex, the price of silver dropped by 1.37% or $0.93 to $66.86 per ounce. Meanwhile, Silver Spot was trading at $66.14 per ounce, down by 0.36% or $0.24.
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