Gold Price Alert: MCX Gold Crashing, Dips Below ₹1.5 Lakh Mark

Gold prices fell sharply on the Multi Commodity Exchange (MCX) on Monday, with the yellow metal slipping below the key Rs 1,50,000 mark as international prices came under pressure from rising oil prices and expectations of further interest-rate hikes by the US Federal Reserve. At around 11:14 am on September 28, the October gold futures contract was trading at Rs 1,47,989 per 10 grams, down 1.92% from its previous close of Rs 1,50,881. The contract had slipped to Rs 1,47,667 earlier in the day, taking the fall from the previous close to more than Rs 3,200.

The decline followed weakness in global markets. Spot gold fell 1.5% to $4,223.95 per ounce in early trade, while US gold futures also dropped 1.5% to $4,257.90. Another report put spot gold near $4,197 later in the session. Analysts said the combination of high bond yields and high oil prices continues to weigh on the metal, and oil has risen on mixed signals about oil flows, which keeps inflation at the centre of investors' attention. Brent crude was trading above $106 a barrel after President Donald Trump rejected Iran's seven-day plan to reopen the Strait of Hormuz, reviving worries about energy supply. Expectations of tighter US monetary policy are the other main factor.

The Federal Reserve raised interest rates by 25 basis points this month, to a target range reported as 3.75% to 4%, its first increase in three years, and markets are pricing in roughly a 67% to 70% chance of another hike in October and a 95% probability of an increase in December, according to the CME FedWatch Tool. Higher interest rates raise the appeal of yield-bearing assets and typically weigh on gold, which pays no interest.

Ten-year and 30-year US Treasury yields rose last week to their highest levels since 2007 and 2004, respectively, and the dollar climbed to a near two-month high. The MCX decline extends a weak run for the metal. Following the Fed's hike on September 17, October futures traded near Rs 1,50,778 per 10 grams, and 24-carat gold in Mumbai was quoted at Rs 1,52,840 per 10 grams that day.

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Monday's futures price therefore sits well below the levels of that session. A separate report put the drop at more than 4% over the past week, citing December futures at Rs 1,49,875, a different contract from the October one quoted above. Internationally, gold had already slipped more than 1% last week to around $4,280 an ounce, its lowest level since early August, as strong US data supported bets on further tightening.

On the MCX, October futures were testing support in the Rs 1,47,300 to Rs 1,48,000 zone. Analysts abroad are watching $4,185 as the next support level for spot gold, with a break below it opening the way to about $4,121. Some analysts say the outlook is not entirely negative. Structural demand from gold-backed exchange-traded funds and central bank purchases may support prices over the longer term. Oil is also a key variable.

One analyst said that if oil prices decline, gold could move higher over the medium term, while until then it is expected to stay range-bound. Physical demand in India has also picked up modestly as lower prices attract buyers ahead of the festive season, although it is too early to say whether that will offset the pressure from global markets. For investors, the direction of gold in the coming days is likely to depend on developments in the US-Iran talks, movements in crude oil, and signals from the Federal Reserve ahead of its next interest-rate decision. Prices have been sensitive to each of these factors. Traders are also watching US economic data for indications of how persistent inflation is, since stronger numbers would reinforce expectations of further rate rises and keep gold under pressure.

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