Gold Prices Slump as Fed Rate Hike Odds Surge Above 70%

Gold prices have declined to three-week lows as investors increasingly anticipate a Federal Reserve rate increase. According to CME's FedWatch tool, there is now a 70% probability of a 25-basis-point hike at the upcoming September 15-16 policy meeting.

The appreciating U.S. dollar and climbing Treasury yields are weighing on gold prices, which have fallen beneath its 200-day moving average. The yellow metal has shed approximately 6% over the course of the week, reaching a three-week low around $4,327 per ounce.

Market strategists at Sucden Financial noted that Friday's U.S. nonfarm payrolls report will probably shape gold's near-term direction. Weaker employment figures could attract bargain hunters, whereas robust job growth might drive yields higher and prolong the metal's downtrend.