Gold Prices Plunge Amid Dollar Strength and Fed Rate Hopes
Gold prices declined on Wednesday, putting them on track for a monthly loss as investors awaited US inflation data to gauge the Federal Reserve's next monetary policy move. Spot gold fell by 0.2% to $1,706.63 per ounce at 01:50 GMT, having dropped more than six percent since the start of the month.
The dollar's strength, which is headed for monthly gains, made dollar-denominated metals more expensive for holders of other currencies. US gold futures rose by 0.5% to $1,721.90.
According to Tony Sage, CEO of Critical Metals, the release of the PCE price index data will be a key test for gold. A weak reading could support gold and pave the way for a return to the $4,200, $4,300 range, while a high reading could drive up yields and the dollar, placing renewed pressure on gold and testing the $4,100 level.
All three precious metals are on track to record monthly declines: spot silver fell by 0.8% to $60.98, platinum held steady at $1,705.10, and palladium dropped by 0.3% to $1,219.60.