Gold Prices Plunge Amid Higher Interest Rate Expectations
Gold prices plummeted on Wednesday, putting it on track for a monthly decline. Expectations of higher interest rates weighed heavily on market sentiment, causing gold to lose value. US inflation data is due out at 12:30 GMT, and investors are eagerly awaiting its release to gauge the Federal Reserve's next policy move.
The spot price of gold fell 0.2% to $4,170.63 an ounce by 01:50 GMT, down more than 6% since the start of the month. US gold futures rose 0.5% to $4,201.90, but this gain was not enough to offset the decline in spot prices.
The dollar's strength is another factor contributing to gold's decline. As the dollar gains value, dollar-denominated metals like gold become more expensive for holders of other currencies.
Analysts predict that a weaker reading in the US Personal Consumption Expenditures (PCE) price index could support gold and push its price back up towards $4,200-$4,300. On the other hand, a stronger reading could lead to higher interest rates and put renewed pressure on gold.