Gold Prices Slide Amid Expectations of Further Fed Hikes

Gold prices have begun the week on a bearish note, snapping a two-day winning streak. The precious metal is trading around $4,350, down nearly 0.60% on the day. This decline comes as expectations of additional Federal Reserve rate hikes and a stronger US Dollar limit the upside for gold.

The Fed's decision to raise interest rates by 25 basis points last week has weighed on non-yielding assets such as gold. Higher borrowing costs make interest-bearing investments more attractive, which in turn puts pressure on gold prices. The prospect of tighter monetary policy supports the US Dollar and keeps Treasury yields elevated, creating a difficult backdrop for gold.

However, the decline in oil prices has kept US Treasury yields below last week's multi-year highs. West Texas Intermediate oil is trading around $93.50, its lowest level in more than a week, and is on track to fall for a fourth straight day. The diplomatic efforts surrounding the war in the Middle East and improving energy flows from Saudi Arabia have contributed to the decline in oil prices.