Gold prices continue to drop amid a strong dollar and US inflation concerns; check rates in your city
Gold prices have experienced a significant decline of around 6% since Diwali, driven by a stronger dollar and concerns over US inflation data.
The price of 24-carat gold per 10 grams, which was Rs 80,710 on November 1, fell to Rs 74,031 at the last closing. This sharp correction reflects the ongoing global economic pressures impacting commodity markets.
The uptick in US inflation has sparked speculation about a potential shift in the Federal Reserve's monetary policy. While the Fed has been pursuing rate cuts as inflation approached its 2% target, the higher-than-expected CPI reading has raised concerns that further cuts may be paused. Additionally, the dollar index, which tracks the US dollar against six major world currencies, stood at 106.68.
Markets now see a 62% chance of a 25 basis point rate cut in December, down from 83% a day earlier, according to the CME FedWatch Tool.
«Gold's weakness persisted with the price falling below $2,550 and near Rs 73,500 in MCX, as the dollar climbed above 106.50 and edged closer to 107. The US CPI data, which came in higher at 2.6% compared to the expected 2.4%, fueled the dollar's strength. While the Fed has been continuing with rate cuts as inflation approached its 2% target, the higher-than-expected CPI reading raises concerns that further cuts may be paused. This development added pressure on gold prices, which reacted negatively to the stronger dollar and the potential shift in Fed policy,» said Jateen Trivedi, VP Research Analyst — Commodity and Currency, LKP
