Gold falls Rs3,800 as global rate hits 1-month low

The price of 10-gram gold declined by Rs3,258 to Rs388,662.

Meanwhile, silver prices decreased by Rs122 per tola to Rs6,802.In the international market, spot gold was down 1.8% at $4,271.59 per ounce by 1328 GMT, after touching its lowest level since August 7, as per Reuters.

US gold futures fell 2.2% to $4,311.20.The decline came as oil prices rallied more than 4%, raising concerns over inflationary pressures, while stronger-than-expected US inflation data released on Friday strengthened expectations that the Federal Reserve could raise rates at its policy meeting on Wednesday.Adnan Agar, Director at Interactive Commodities, said gold had declined after reaching an international market low of $4,255 per ounce, but recovered slightly to around $4,310.

He said the Fed's decision on Wednesday would be crucial, particularly whether the central bank adopts a dovish or hawkish tone."If the rate goes up but the tone is dovish, gold will bounce back.

However, if the rate is increased and the Fed chairman's tone is hawkish, gold could fall further," Agar said.

Prices decline ahead of Fed decision; oil rally fuels rate hike bets.