Gold Prices Correct After Failing To Sustain Recent Rally
· Business · Times of India, Business Standard
Gold prices have entered a corrective phase after failing to maintain levels between Rs 163,000 and Rs 166,000. The precious metal recorded a nearly 3% decline last week, marking its steepest weekly drop in several weeks. This downturn followed Fed Chair Warsh’s Jackson Hole speech, which signaled that US monetary policy may remain restrictive to combat inflation. Consequently, the probability of a 25bps rate hike in September rose to approximately 57%, pushing US Treasury yields and the dollar higher. Despite this recent correction, analysts maintain that the medium-term investment case for gold remains supported by concerns over US fiscal deficits and geopolitical risks.
Why it matters
The shift in US interest rate expectations directly impacts gold prices, which are sensitive to the strength of the dollar and Treasury yields. Investors monitoring precious metals should note that higher rates typically reduce the appeal of non-yielding assets like gold.
Read the original report — Times of India
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