Gold Tumbles Below $4,300 as Rate Hike Expectations Rise

Gold prices fell below $4,300 on September 24 as the European session got underway. The precious metal hit an intraday low of $4,262.45 before rebounding to some extent.

The main driver of gold's decline is the Federal Reserve's expected rate hike policy. Following a preliminary U.S. September Composite PMI reading of 58.4, which marked its highest level since July 2021, market expectations for another rate hike in October rose from 55.4% to 75.3%. This increase in Fed rate-hike expectations put upward pressure on the 10-year U.S. Treasury yield, which hit a new high of 5.148% since 2007.

However, falling oil prices are providing some support for gold, with WTI crude dropping by about 0.8% to $91.23 in early Thursday trading after Iran indicated its willingness to end the conflict through diplomatic means and evaluate the U.S. response to the peace plan.