Gold prices fell further in the international market on Tuesday, with spot gold dropping 0.2 per cent to $4,287.69 per troy ounce by noon.
Gold had already suffered a sharp decline on Monday, falling to its lowest level since August 7 and marking its lowest price in the international market in a month. US gold futures also fell 0.5 per cent to $4,328.10 an ounce.
The decline came amid fresh inflation concerns following a rise in global oil prices. US consumer spending and its core index also rose at their fastest pace in four months in August, raising concerns that the US Federal Reserve may keep interest rates high for longer.
The Federal Reserve is scheduled to announce its interest-rate decision on Wednesday after a two-day meeting. The market expects the Fed to raise its policy rate by 25 basis points.
Gold does not generate interest. As interest rates rise, returns from other income-generating assets become more attractive, increasing the opportunity cost of holding gold. This has prompted investors to turn away from the precious metal.
Based on the international spot price of $4,287.69 per ounce and an exchange rate of Tk 123 per dollar, the price of one bhori of gold in the global market is currently around Tk 197,800.
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