Fed Fears Send Gold Prices Plummeting 22% From January High

Gold prices dropped by 0.3% on Tuesday as investors increasingly priced in a higher-for-longer US interest-rate environment, adding pressure to an already down market.

The key shift is coming from the Federal Reserve, where traders now see a 90% probability of another rate increase in December, up from 80% a week earlier, according to the CME FedWatch Tool.

Stronger rate-hike expectations and recent dollar strength outweighed gold's traditional safe-haven appeal, with spot gold falling to $4,332.34 an ounce and U.S. gold futures dropping to $4,370.40.

TD Securities global head of commodity strategy Bart Melek said the market is continuing to robustly price Fed hikes, despite oil trending down somewhat.