Gold Prices Plunge By A Whopping Rs 700 In India On Fed Hike Tremors

Gold prices in India plunged by a whopping Rs 700 per 10 grams for 22k. Prices of 22k in Chennai was retailing at Rs 51,650 per 10 grams, while price of 22k gold in Bengaluru was retailing at Rs 51,050 per 10 grams.

Prices of 22k and 24k gold in major cities of India for 10 gms

Why gold prices in India dropped?

One of the prime reasons for the fall in gold rates in India was the fall in international gold prices. The US Federal Reserve Chairman, Jerome Powell said "if the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," the central bank leader said in prepared remarks for appearances this week on Capitol Hill. This led to a sharp fall in gold prices across the global markets and also in India. The last 1-year has been good for gold rates across the country, thanks to a decline in the rupee. The currency has been constantly falling against the dollar, which has made gold a little expensive. Retail investors who have been waiting for a drop in gold prices would see this as a welcome relief. At the moment gold prices are the cheapest in cities like Kerala and Hyderabad. There is a possibility that gold rates would move in a tight range in the coming days, as investors look to the US fed for signals of lower interest rates. At lower prices it is a good idea to buy into gold as a diversification measure. With the festival season and the marriage season currently on investors would be happy to see a drop in rates. Interestingly, the Sovereign Gold Bonds are now open for investing. In the next few days it is likely that we could see some stability in prices.