Gold Prices Plummet Below $4,400 on Hawkish Fed Bets and Firm USD

Gold prices dropped to nearly a two-week low on Tuesday, falling below $4,400 as traders increased bets for a rate hike in September following Fed Chair Kevin Warsh's hawkish remarks.

The central bank may consider raising interest rates if inflation does not slow down significantly, adding to the case for some policy tightening by the Fed.

Rising energy prices due to escalating US-Iran tensions have revived fears of persistent inflation and increased bets on a potential interest rate hike.

According to CME Group's FedWatch Tool, traders are now pricing in over a 65% chance that the Fed will raise borrowing costs at the upcoming policy meeting on September 15-16.