Gold Prices Plummet Below $4,000 Amid Fed Decision and Geopolitical Tensions

Gold prices dipped below $4,000 per ounce as investors awaited the US Federal Reserve's monetary policy decision and assessed ongoing geopolitical tensions in the Middle East. The precious metal traded at around $4,010 per ounce, down 0.6% from the previous day.

The Fed is widely expected to maintain its current interest rates, although there is a 36% probability of a 25-basis-point increase on Wednesday and an 80% chance of a hike in September. Higher interest rates tend to weigh on non-yielding assets like gold by increasing their opportunity cost.

Commerzbank has lowered its year-end gold price forecast to $4,500 per ounce, while projecting that silver could reach $67 per ounce. Geopolitical risks remain high after Tehran rejected an Omani proposal for joint regional management of the Strait of Hormuz, reducing expectations of a easing in regional tensions.