Gold Price Plummets as Hawkish Fed Sentiment Drives Up Interest Rate Hike Expectations

Gold prices dropped to near $4,275 in early Asian trading on Friday as investors became increasingly convinced that further Federal Reserve interest rate hikes are on the horizon. The New York Fed's John Williams and Cleveland Fed's Beth Hammack are set to speak later in the day, adding to market uncertainty.

The price decline comes as oil prices rebounded after talks between the US and Iran showed little sign of progress, fueling inflation concerns. Yields on long-dated US bonds also climbed to their highest levels in over two decades, making gold less attractive compared to yield-bearing assets like bonds.

Markets are now pricing in a 67.5% chance that the Fed will raise interest rates by a quarter percentage point in October, up from 55.4% last week, according to the CME FedWatch tool.