Gold Price in Chennai Falls to ₹1.14 Lakh: Will US Fed Decision Decide the Next Move?

Gold prices have dropped sharply from ₹1.20 lakh to ₹1.14 lakh per sovereign in Chennai. Investors are now watching the US Federal Reserve’s upcoming interest-rate announcement for clues about the next trend.

Gold prices in Chennai have witnessed a significant correction after crossing the ₹1.20 lakh mark per sovereign on August 24. With prices now around ₹1.14 lakh, gold investors are closely watching developments in the United States, particularly the upcoming Federal Reserve interest-rate decision.

The recent movement has raised an important question among investors: Will gold prices rise again, or could the correction continue?

Gold Price in Chennai Today

Gold is currently trading at around ₹14,270 per gram in Chennai, taking the price of one sovereign, or 8 grams, to ₹1,14,160.

In the international market, gold was trading at around $4,470.20 per ounce yesterday.

The international gold price had crossed the $3,600-per-ounce level on August 25. However, prices subsequently witnessed a sharp decline within just three or four days.

Iran Conflict and Crude Oil Not the Main Reason

The recent fall in gold prices is not being attributed primarily to the Iran conflict or crude oil prices.

Historically, rising geopolitical tensions, including developments involving Iran, and increases in crude oil prices have influenced gold prices. However, gold`s reaction to these factors has changed in recent weeks.

Since last month, gold prices have shown less reaction to crude oil movements. The market appears to have increasingly treated fluctuations in crude prices and the Iran conflict as part of the “new normal”, with other international developments now playing a bigger role.

Therefore, the recent decline in gold prices cannot simply be explained by crude oil prices crossing the $90-per-barrel mark.

Why the US Federal Reserve Matters for Gold

The US Federal Reserve`s interest-rate decision is one of the key factors that can influence international gold prices.

Gold does not provide regular interest income. Therefore, when the Federal Reserve raises interest rates, interest-bearing investments can become more attractive to investors. This can put pressure on gold prices.

Conversely, when interest rates are reduced, returns from interest-bearing investments may decline. This can encourage investors to consider gold as an alternative asset, potentially supporting its price.

September Fed Meeting in Focus

The Federal Reserve is scheduled to hold its meeting on September 15 and 16, when a decision on interest rates is expected.

Meanwhile, data released on September 4 showed an increase in US employment. Stronger employment can contribute to higher consumer spendingng and may influence expectations about the Federal Reserve`s monetary policy.

The possibility of a change in interest rates has therefore become an important factor for gold investors. Uncertainty over the Fed`s decision could act as a “speed bump” for further gold price gains until the announcement is made.

What Should Gold Investors Watch?

For now, investors should closely monitor US employment data, Federal Reserve policy expectations, international gold prices and currency movements.

The fall from ₹1.20 lakh to around ₹1.14 lakh per sovereign shows how quickly gold prices can respond to global developments. The September 15–16 Federal Reserve meeting is therefore likely to remain a major focus for the gold market.

For gold investors, the key question now is whether the Fed`s decision will provide the next trigger for gold prices to rise or extend the current correction.