Gold Slumps on Hawkish Fed Odds and Rising Yields

Gold prices fell on Tuesday due to a stronger US dollar and rising Treasury yields. The metal hit its lowest point since August 7, falling 0.3% to $4,285.88 an ounce.

The decline in gold was attributed to the expectation of higher interest rates by the Federal Reserve this week. Financial markets are betting on a quarter-point rate hike to the 3.75%-4.00% range.

Analysts at ING noted that much of the hawkish Fed risk appears to be priced in, but gold could remain vulnerable if policymakers signal rates will stay higher for longer.