Gold Slumps Below $4,300 as Rate Hike Bets Intensify

Gold prices fell below $4,300 an ounce on Monday as expectations of a US interest rate increase strengthened. The precious metal's value declined by roughly 0.9% in the session, extending its downward trend after three consecutive weekly falls.

Silver also suffered losses, dropping around 2% to $62.52 an ounce, amidst rising inflation concerns and hawkish monetary policy expectations.

The Fed rate hike bets were fueled by hotter-than-expected US inflation data, which increased the probability of a rate increase to 89%, up from around 67% previously. Goldman Sachs and HSBC expect a 25 basis-point move.

Higher interest rates typically weigh on gold because it pays no interest, while a stronger dollar makes bullion more expensive for buyers using other currencies.