Dollar Surge Weighs on Gold Prices Amid Hawkish Fed Outlook

Gold prices retreated on Wednesday as traders focused on the strengthening US dollar and anticipated another potential rate hike from the Federal Reserve.

The FedWatch Tool indicates a 53.1% probability that the Fed will raise the federal funds rate at its next meeting in October, with a 42.4% chance of two rate hikes by year-end.

Despite the Treasury yields moving lower in today's trading session, gold markets did not receive any support from this development.

The US dollar continued to rise against a broad basket of currencies as traders ignored the pullback in Treasury yields and focused on the hawkish Fed policy outlook.

This put pressure on gold markets, with its nearest support level located between $4300-$4320. If gold pulls back below this range, it will head towards recent lows near $4250.