Gold Falls as Fed Hike Expectations Rise and Dollar Strengthens
Gold prices are struggling to stay above $4,300 as investors await the outcome of the upcoming meeting between US President Donald Trump and Chinese President Xi Jinping.
The US Dollar's strength and expectations for a Federal Reserve rate hike in October are also weighing on gold. Data from CME Group's FedWatch Tool shows that markets are assigning nearly a 70% probability to another Fed rate hike in October, which is supporting the case for higher yields and a stronger greenback.
The tension between the US and Iran has driven crude oil prices up by 3%, rekindling inflation worries and reinforcing the Fed's hawkish stance. The US-Iran tensions have also contributed to the rise of the US Dollar, which is making it more expensive for investors to hold gold.