Gold prices dip 6% amid stronger Dollar and US inflation concerns
Gold prices have witnessed a significant decline of around 6 per cent since Diwali, driven by a stronger dollar and concerns over US inflation data.
The rate of 24-carat gold per 10 grams, which stood at Rs80,710 on November 1, dropped to Rs75,920 on Saturday. This sharp correction reflects ongoing global economic pressures influencing commodity markets.
Jateen Trivedi, VP Research Analyst — Commodity and Currency, LKP Securities, highlighted the factors behind the price drop, stating, «Gold's weakness persisted with prices falling below USD 2,550 and near Rs73,500 on MCX as the dollar climbed above 106.50 and edged closer to 107. The US CPI data, which came in higher at 2.6 per cent compared to the expected 2.4 per cent, fueled the dollar's strength.»
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 per cent target, the higher-than-expected CPI reading has raised concerns that further cuts may be paused.
Trivedi noted, «This development added pressure on gold prices, which reacted negatively to the stronger dollar and the potential shift in Fed policy.»
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