Gold Futures Plunge to Rs 1.36 Lakh Amid Inflation Fears and Strong US Dollar
Gold prices experienced a significant decline in futures trading, dropping by Rs 8,089 to Rs 1.36 lakh per 10 grams on Monday. This sharp decrease follows a global sell-off driven by rising inflation concerns and a firm US dollar.Market Performance
On the Multi Commodity Exchange, gold for April delivery saw a substantial slump. The price decreased by Rs 8,089, representing a 5.6 per cent reduction, to close at Rs 1,36,403 per 10 grams.Last week, gold prices on the commodities exchange fell by Rs 13,974, or 8.82 per cent, to approximately Rs 1.44 lakh per 10 grams. Analysts predict the precious metal will extend its losing streak for a fourth consecutive week, resuming with a gap down.
International Market Trends
The international market mirrored this downward trend, with gold futures on the Comex declining for a fifth consecutive session. The April contract depreciated by USD 202.4, or 4.42 per cent, to USD 4,372.5 per ounce.Overseas markets witnessed a plunge of USD 486.8, or 9.6 per cent, in gold futures last week, settling at USD 4,574.9 per ounce.
Factors Influencing Price
Analysts attribute the price decline to several factors, including intensified Middle East conflict fueling inflation fears and pressure on major economies to boost liquidity, potentially through gold sales. Surging oil prices have also contributed to inflation concerns, prompting expectations of prolonged pauses or rate hikes by major central banks.The dollar index has remained firm above the 99 level, putting pressure on the Indian rupee, which has weakened near the 94-level against the US dollar. Elevated crude prices and rising import costs are likely to widen India's trade deficits and further stoke domestic inflation. These factors are expected to continue to pressure safe-haven assets like gold in the near term.
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