Gold Prices Tumble Below $4,300 Amid Hawkish Fed Signals

Gold prices plummeted to nearly $4,290 during the early Asian session on Thursday, as hawkish signals from Federal Reserve policymakers boosted rate hike expectations. The precious metal lost momentum after Fed Governor Michael Barr stated that 'further policy adjustments are likely to be needed' to control inflation.

The probability of a US central bank interest rate hike in October rose to 69.7% following the developments, up from 48.7% a week ago. Higher interest rates typically weigh on gold as it does not pay interest, making yield-bearing assets more attractive.

Peter Grant, vice president and senior metals strategist at Zaner Metals, attributed the pressure on gold to 'post-FOMC Fed speak,' which has been fairly hawkish, building in expectations of at least one more rate hike before the end of the year.