Gold Prices Plummet Amid Rising Dollar and Interest Rate Hopes
Gold prices took a hit on Wednesday, falling by 0.2% to $1,706.63 per ounce in Singapore. This marks a six percent decline since the beginning of the month for spot gold.
The US dollar is gaining strength, making dollar-denominated metals more expensive for holders of other currencies. As a result, investors are awaiting US inflation data for clues on the Federal Reserve's next monetary policy move.
According to Tony Sage, CEO of Critical Metals, 'The release of the PCE price index data will be a key test for gold.' A weak reading would likely support gold and pave the way for a return to the $4,200, $4,300 range, while a high reading could drive up yields and the dollar.
The Federal Reserve raised interest rates by 25 basis points earlier this month. Traders see a 47% probability of another hike in October and a 91% probability in December, as indicated by CME's FedWatch tool.