Precious Metals Plummet as Fed Rate Hike Expectations Rise

The prices of gold and silver plummeted on Tuesday due to expectations of a Federal Reserve rate hike, a strengthening dollar, and higher crude oil prices.

Market participants have increasingly priced in a possible Federal Reserve rate move in September, with odds standing near 66% to 67.5%, according to the latest data. This has led to a decline in spot gold by 1.72% to $4,370.80 per ounce and spot silver by 2.73% to $64.60.

The strengthening dollar, which is at its highest since January 2025, and higher crude oil prices are also contributing to the downward pressure on precious metals. The Strait of Hormuz remains a key geopolitical conduit affecting oil, inflation expectations, and defensive buying.