Gold Prices Plummet on Hawkish Fed Comments

Gold prices took a hit on Wednesday due to hawkish comments from US Federal Reserve officials that reinforced expectations of tighter monetary policy.

The spot price of gold fell by 0.9% to $4,316.78 per ounce as the dollar rose to its strongest level in two months, making greenback-priced bullion more expensive for holders of other currencies.

Rising interest rates can reduce the attractiveness of gold as investors gravitate toward interest-bearing assets, despite it being often seen as a hedge against inflation.

The Richmond Fed President Tom Barkin said that rate hikes could temper business inflation expectations without slowing down economic activity.