Gold Crumbles Under Fed Hike Odds: $4,286 Becomes Key Support Level

Gold's price action is experiencing difficulties due to ongoing geopolitical tensions in the Middle East and rising inflation in the US. As a result, the precious metal is trading at around $4,330 with an 87% probability of a Fed rate hike coming this week.

The surge in U.S. inflation, estimated at 3.4%, is further fueling expectations of a higher interest rate environment. Goldman Sachs has now reversed its call for no change and expects a 25-basis point hike on Wednesday, September 15-16.

As the market anticipates a 25-bps rate increase, gold faces a bearish scenario with increasing yields and a stronger dollar. The first significant support level is at $4,286, while resistance is found at $4,401.