Gold Prices Drop Sharply By Rs. 380: US Fed Chair Powell Hints Further Rate Hike

At the Jackson Hole, Wyoming Federal Reserve annual symposium, which was concluded yesterday, US Federal Reserve Chairman Jerome Powell indicated that the US Central Bank can initiate further rate hikes. The US Fed will organize its monetary policy meeting next month, On September 21, Powell will announce its next policy measures. Before that, the Fed official sounded hawkish against inflation. Following Fed Chair's speech, gold markets and stock markets immediately fell sharply. On the other hand, the US Dollar index showed an upward trend. Reflecting the same trend, Indian gold prices also dropped today. Today, on August 27, the 22-carat gold rate stood at Rs. 47,300/10 grams, and 24-carat gold rate stood at around Rs. 51,600/10 grams, falling by Rs. 350-380/10 grams.

Yesterday Jerome Powell mentioned, "Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy...In July's increase in the target range was the second 75 basis point increase in as many meetings, and I said then that another unusually large increase could be appropriate at our next meeting. We are now about halfway through the inter-meeting period. Our decision at the September meeting will depend on the totality of the incoming data and the evolving outlook. At some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases." Hence, anticipating further rate hikes, the gold markets are showing a downward trend today.

Today, the Comex gold futures were quoted at $1,750.80/oz, falling by 1.16%, from the last trading day. Yesterday it was last quoted at $1,771.40/oz. The yellow metal fell by 4.94% this year in the futures market. The spot gold prices were last quoted at $1740.10/oz, falling by 1.13%, from the last trading day. The US Dollar index is quoted at 108.83. In India, the Mumbai Commodity Exchange (MCX) gold in October future was quoted at Rs. 51234/10 grams, falling by 0.91%, from the last trading day.

Gold rates are quoted differently, daily. Today's gold rates in major Indian cities follow: