Gold sees a big fall

NEW DELHI, Sept 15 (Reuters): Gold prices fell on Thursday more than 1.0 per cent as the dollar jumped after higher-than-expected rise in US inflation cemented bets for aggressive rate hikes from the US Federal Reserve.
In India, MCX gold futures fell 1 per cent to near one-month low of Rs 50,135 per 10 gram while silver tumbled 1.4 per cent to Rs 56,693 per kg.
In global markets, spot gold prices fell 1.1 per cent to $1,705.94 per ounce. The US Labor Department's consumer price index (CPI) report showed monthly CPI gained 0.1 per cent in August from July, against expectation of a 0.1 per cent dip. Excluding the volatile food and energy components, core CPI increased to 6.3 per cent from 5.9 per cent in July.
The US bond yields firmed up after US inflation data. The dollar index rose 1 per cent, making gold more expensive for overseas buyers. Although gold is considered a hedge against inflation, rising US rates increase the opportunity cost of holding bullion.