Gold Prices Plummet on Rising Inflation Expectations and Stronger Dollar
Gold prices declined on Thursday due to a stronger U.S. dollar and heightened market speculation regarding upcoming U.S. inflation data.
The spot gold price dropped by 0.9%, settling at $4,359.19 per ounce, while U.S. gold futures fell 1.3% to $4,402.50.
This decline came on the heels of robust U.S. inflation data, which has led many to increase their expectations of a rate hike by the Federal Reserve in the near term.
According to Kyle Rodda, a senior financial market analyst at Capital.com, 'the Producer Price Index (PPI) indicated a notable uptick in underlying inflation attributed in part to climbing energy costs.'
Market analysts now project a roughly 68% chance of a rate hike at next week's Federal Reserve meeting, up from 62% before the recent inflation data was released.