Spot gold down as inflation fears dim Fed interest rate-cut prospects
This story was originally published at 14:25 IST on 16 March 2026
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By Reshma Ravi
MUMBAI – Gold opened lower in the spot market Monday, tracking a fall in futures contracts on the Multi Commodity Exchange of India and COMEX on fading hopes of a rate cut by the US Federal Reserve following the sharp rise in crude oil prices, which has renewed concern of a rise in inflation, traders said.
In Mumbai, the spot price of gold of 99.9% purity opened at INR 156,436 per 10 grams, down from Friday's closing price of INR 158,399 per 10 grams. Dealers are offering a discount of INR 2,200 per 10 grams, said Kumar Jain, spokesperson for the India Bullion and Jewellers Association. Retail demand in India remained weak owing to high prices and import duties, Jain added.
"Higher energy prices and mounting inflationary pressures have lowered the probability that major central banks will cut interest rates," ICICI Direct said in a report. Friday, US President Donald Trump authorised strikes on Iranian military targets on Kharg Island and warned that he could order attacks on the country's oil installations there.
Meanwhile, on Saturday, Trump urged China, France, Japan, South Korea, Britain, and other countries affected by the restrictions on shipments through the Strait of Hormuz to collaborate in restoring the shipping route. Trump, who said the US would be hitting Iran "very hard" this week, added that he was insisting that other countries help in safeguarding the Strait of Hormuz, noting that Washington was engaging in discussions with various nations regarding regulation of the vital shipping route for oil and gas. In a different interview with the Financial Times, he cautioned that the North Atlantic Treaty Organization could have a very bad future if US allies do not help in opening the Strait.
Additionally, "US Federal Reserve is widely expected to hold interest rates steady for a second straight meeting when it gives its policy statement on Wednesday," SMC Global Securities said in a report. End
Edited by Rajeev Pai
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