Fed Hawks and Strong Dollar Send Gold Plummeting

Gold prices plummeted by over 1.5% during the North American session on Wednesday as investors grew increasingly confident that the Federal Reserve would raise interest rates at its October meeting.

The surge in confidence comes after several Fed officials made hawkish remarks, with some warning of elevated inflation risks and backing further rate hikes to tame inflation.

US 10-year Treasury yields soared by 15 basis points to 5.12%, while the US Dollar Index (DXY) rose 0.7% to 101.22, a headwind for gold prices.

The strong US economic data, including September's US Flash Manufacturing PMI of 57.0 and Services PMI increase from 56.5 to 58.7, also contributed to the dollar's strength and gold's sell-off.