Gold Prices Decline Amid Interest Rate Hike Expectations

Gold prices have declined to $4,439 an ounce on September 8, down from its January peak of roughly $5,600. The metal's price has weakened due to expectations that the US Federal Reserve will raise interest rates this month.

The rise in interest rates typically makes non-interest-bearing assets less attractive, but analysts say gold will resume its long-term rally before the year end. Despite the current volatility, institutional investment has declined following the correction starting in late January, but there is some renewed institutional buying.

Philip Newman, director of Metals Focus, said 'There's an interplay of factors convincing investors to hold gold despite the rising treasury yield curve and a growing market consensus for an interest rate hike, normally those would weigh on gold.'