Gold Slides to $4,350 on Strong Dollar and Fed Hike Odds
Spot gold fell 0.6% to $4,350.39 as a stronger dollar and high odds of further rate hikes pressured the metal.
Key points
- Spot gold fell 0.6% to $4,350.39, hitting a session low of $4,322.19 on Monday.
- Traders price in an 88% chance of a U.S. rate hike in December, pressuring bullion.
- The U.S. dollar rose over 1% last week, making gold more expensive for foreign buyers.
Spot gold dropped 0.6% to $4,350.39 per ounce on Monday. The metal hit a session low of $4,322.19 before stabilizing slightly. This decline followed a broader pullback from recent highs.
The U.S. dollar strengthened by more than 1% last week. A stronger currency makes gold costlier for foreign buyers. This dynamic reduced demand for the precious metal globally.
Fed Hike Expectations Pressure Metal
Traders assign an 88% probability to another rate hike in December. Higher yields make interest-bearing assets more attractive than gold. The Federal Reserve raised rates last week amid persistent inflation.
Geopolitical Tensions Influence Inflation Outlook
Conflicts in the Middle East have pushed energy prices higher. This increase adds to inflation concerns across the U.S. economy. Oil prices moved lower on Monday but remain a key variable.
Other Precious Metals Show Mixed Results
Silver fell 0.1% to $66.14 per ounce on the day. Platinum gained 0.2% to reach $1,803.67 per ounce. Palladium rose 0.4% to close at $1,306.93 per ounce.
TD Securities views near-term weakness as a potential buying opportunity. The firm notes that gold remains 17% below its February peak. The Economic Times reports that market sentiment remains cautious.
