1 hr ago
Gold Slips as US Inflation Raises Federal Rate Hike Odds
Gold prices fell a little because prices in the United States rose more than expected.
Higher inflation can make the Federal Reserve raise interest rates.
When interest rates may rise, gold can become less attractive to investors.
Spot gold was near $4,340 per ounce.
Silver prices also fell, along with platinum and palladium.
Oil prices rose above $107 a barrel because shipping and supply routes faced risks.
Gold and silver futures on India’s MCX traded only in the evening on Monday because of Ganesh Chaturthi.
Traders estimated an nearly 88% chance of a Federal Reserve rate hike in September.
Spot gold fell nearly 0.2% to about $4,340 an ounce on Monday and was down 1.8% for the week.
MCX gold futures expiring in October stood at Rs 1,52,655, while September silver futures stood at Rs 2,34,886 per kilogram.
Higher-than-expected US inflation increased expectations of a Federal Reserve rate hike later this week.
Traders priced in an nearly 88% chance of a September rate hike, potentially the Federal Reserve’s first in three years.
Red Sea shipping concerns and attacks affecting regional energy infrastructure pushed WTI crude above $107 a barrel and pressured precious metals.
- Who
- Gold and silver traders, the Federal Reserve, and market participants.
- What
- Gold prices declined as higher US inflation increased expectations of a Federal Reserve interest-rate hike.
- Where
- Global markets, including India’s Multi Commodity Exchange of India and shipping routes around the Red Sea and Strait of Hormuz.
- When
- Monday; the inflation data was released on Friday, and the expected rate decision was later that week.
- Why
- Higher inflation and rising crude-oil prices increased expectations of tighter monetary policy, while shipping disruptions raised supply concerns.
Key facts
- Spot gold
- Near $4,340 per ounce, down nearly 0.2% on the day
- Weekly gold performance
- Down 1.8% for the week
- MCX October gold futures
- Rs 1,52,655
- MCX September silver futures
- Rs 2,34,886 per kilogram
- Core US inflation
- Rose 0.3% month over month in August
- Rate-hike probability
- Traders priced in nearly an 88% chance of a September Federal Reserve rate hike
- WTI crude
- Rose above $107 per barrel amid supply and shipping concerns
Sources
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