Gold Prices Set for Unexpected Bounce Amid Fed Rate Hike Expectations

Gold prices experienced volatility last week due to various market factors.

The precious metal initially maintained its upward momentum from the previous week as investors monitored US-Iran tensions, Strait of Hormuz disruptions, and rising energy prices.

However, this trend quickly reversed as the USD strengthened, and expectations that the Federal Reserve (Fed) would continue to tighten monetary policy increased.

The market saw selling pressure on Wednesday and Thursday after PPI data showed inflation in the US rose again in August, raising concerns about continued energy costs and supply chain disruptions.

Gold prices fell below $4,350 per ounce amid rising US Treasury bond yields and investors adjusting their expectations towards a potential interest rate hike by the Fed.