Gold and silver prices just took a hit. December gold futures were trading at ₹1.38 lakh per 10gm, down 0.93%, and silver futures dropped to ₹1.82 lakh per kilogram.
The main reason? US inflation came in hotter than expected, making investors worry about more interest rate hikes from the Federal Reserve.
Central banks keep buying gold
Higher US inflation (up 0.4% in October) means people are leaning toward interest-earning options instead of gold or silver, which do not pay out any returns.
The stronger US dollar is also making gold pricier for buyers outside the US.
Still, central banks like China's are buying up gold, which is helping steady things a bit.
As Managing Director of RiddiSiddhi Bullions and president of the India Bullion and Jewellers Association (IBJA) Prithviraj Kothari put it, if these trends continue, "gold could test $3,900 an ounce."