Gold Prices Slide as Stronger US Dollar Weighs on Gold

Gold prices fell nearly 1% in European trading on Wednesday, resuming losses after a temporary pause on Tuesday. This decline is attributed to the broad strength of the US dollar in the foreign exchange market.

The US Dollar Index rose 0.3% on Wednesday, reaching a two-month high of 100.84 points. A stronger US dollar makes dollar-denominated gold less attractive to buyers holding other currencies.

Federal Reserve officials' recent comments have been more hawkish than expected, strengthening expectations for a US interest rate hike in October. Minneapolis Federal Reserve President Neel Kashkari stated that inflation remains far too high and has broadened beyond the oil price shock caused by the war in Iran.