Gold Price Down Sharply:US Inflation Rallies To 8.2%,Interest Rate Hike Expected

The global gold market again comes under pressure today, as the US inflation data rallied sharply in September, the report published today. In the Comex, December gold futures fell to around US$ 1650/oz.

According to today's CPI (retail inflation) data in the US, in September inflation gained to 8.2% YoY, up by 0.4% from August. In the last month, inflation gained to 8.3% YoY. Hence, investors are expecting that the US Federal Reserve will keep raising the interest rate to cool down the high inflation rate. The Fed is trying to restrict the inflation rate to 2%, buy failing consistently. With the central bank's hawkish stance, the Bond Yields will gain again, keeping the commodity markets under pressure.

The gold and silver markets are taking an interesting turn this year. It is a trend that with a rising inflation rate, commodity prices like gold and silver prices gain, as a hedge against inflation. However, the US Fed's hawkish monetary policy regarding the rate hike is changing the course. As the inflation data came out to be at a high position, investors and traders against worried about further rate hikes. Gold and silver prices fell eventually.

Meanwhile, the 2-year Treasury bond yield increased to around 4.434%, and the 10-year U.S. Treasury yield increased sharply to around 3.935%. Today, the US Dollar index increased to 112.41, falling by 0.80%, at the time of writing.

However, it will be good for the Indian retail gold markets ahead of the festive season, as a falling gold price tend to boost the demand. In India, the 22-carat gold rate is quoted at Rs. 46,750, and the 24-carat gold rate is quoted at Rs. 51,000/10 grams. Silver price stood at Rs. 5730/100 grams, falling by Rs. 120. Additionally, in the Mumbai Commodity Exchange (MCX), gold in December future is quoted at Rs. 50,874/10 grams, down by 0.06%