Gold Prices Tumble Amid Stronger Dollar and Higher Interest Rate Expectations
World gold prices plummeted on September 23 as the US dollar strengthened to a two-month high, making gold less attractive to investors. The spot world gold price decreased by 0.9% to $4,317.3 per ounce at the time of writing.
The downward trend is attributed to the expectation that central banks will maintain higher interest rates for a longer period, which makes gold an unprofitable asset. This is because gold is often less attractive when profit-seeking investment channels become competitive.
Developments in world oil prices and diplomatic signals from major economies are also contributing factors. The US Federal Reserve's decision to raise interest rates by another 0.25 percentage points last week, bringing the reference interest rate to 3.75-4%, is a key factor influencing gold prices.