Gold Prices Plummet Amid Stronger Dollar, Fed Uncertainty
Gold and silver prices declined on Tuesday due to a stronger US dollar and uncertainty surrounding the US Federal Reserve's policy meeting. Comex gold futures fell $66 per troy ounce to an intraday low of $4,011, while silver futures dropped nearly $1.85 per troy ounce to $56.86.
The US Dollar Index traded around 101.5 against a basket of major currencies as markets priced in more than a one-third probability of a Federal Reserve rate hike later this year. Since the outbreak of the US-Iran conflict, expectations of higher interest rates have strengthened, making precious metals less attractive to investors.
Interest-rate swaps imply about a one-in-three chance of a quarter-percentage-point rate hike, an unusually high degree of uncertainty close to a Fed policy decision. Despite repeated calls from US President Donald Trump for lower interest rates, the Federal Reserve signalled further policy tightening remains possible.