Gold Falls on Higher Interest Rates and Strong Dollar

Gold prices fell on Wednesday as investors weighed the impact of higher interest rates and a strong dollar. Spot gold declined by 0.6% to $4,329.31 an ounce, while US gold futures for December delivery lost 0.2% to $4,366.90.

The dollar's two-month high added pressure on bullion by making dollar-denominated gold more expensive for buyers using other currencies.

Expectations of prolonged elevated interest rates also reduced investor appetite for gold. Higher rates can reduce the appeal of gold as a hedge against inflation, as returns available on interest-bearing assets increase.

The US Federal Reserve last week raised its benchmark interest rate by 25 basis points to a range of 3.75%-4.00%, and signalled that another increase could come before the end of the year.