Gold Slips Below $4,300 as Dollar Strength and Rate Hike Bets Weigh

Gold prices slipped below $4,300 an ounce on Tuesday as a stronger dollar and expectations of a Federal Reserve rate hike put pressure on bullion. The firmer dollar and higher Treasury yields have added to the downward momentum in gold.

The recent oil price surge following Saudi Arabia's pipeline shutdown has raised concerns about inflation, which has increased the likelihood of a Fed rate increase. Markets are now pricing a 92% probability of a hike this week.

Higher borrowing costs tend to weigh on gold as it does not pay interest, making assets that generate yields more attractive when rates rise.

Despite the near-term pressure, investors remain optimistic about gold's long-term prospects. OCBC has raised its precious-metals forecasts, expecting gold to reach $4,600 an ounce by December 2026 and silver to hit $69.70 an ounce.