Gold Prices Tumble Amid Rate Hike Expectations
The price of gold continues its decline amid growing expectations that the Federal Reserve will soon raise interest rates. As of Tuesday morning, gold prices stood at around $4,414.50, down approximately 1.5% from Monday's closing price. Silver prices also fell, dropping by more than 2% to about $65.01.
Ole S. Hansen, head of commodity strategy at Saxo Bank, attributed the decline in gold and silver prices to rate hike expectations, as well as a strengthening dollar. The Federal Reserve chair, Kevin Warsh, had suggested that the central bank may have 'work to do' if inflation does not return to its 2% target, sparking rate hike expectations.
Before the recent decline, gold and silver prices had been on an upswing in August, reaching a 15-week high. Analysts attributed this rise to a weakening U.S. dollar. However, with the strengthening of the dollar and growing rate hike expectations, prices have begun to fall.