Spot gold fell 1.2% to $4,062.72 an ounce by 23:55 ET (03:55 GMT), while U.S. Gold Futures declined 1.7% to $4,079.87. Prices tested the psychologically important $4,000-per-ounce level and have now fallen in five of the last six sessions, following three consecutive weekly losses.<\/p>\n
The U.S. dollar index (DXY) climbed to a fresh 13-month high on Wednesday as markets increased bets that the Federal Reserve could raise interest rates as soon as July and again later this year. A stronger dollar makes gold more expensive for holders of other currencies, while higher interest rates raise the opportunity cost of holding non-yielding assets such as bullion.<\/p>\n
Traders now see a substantially higher probability of Fed tightening in the coming months after last week\u2019s policy meeting and hawkish commentary from officials. Markets are pricing in roughly a 70% probability of a rate hike by September and are fully pricing in another increase by December.<\/p>\n
According to ING analysts, \u201ca stronger US dollar and expectations that the Fed could keep rates higher for longer outweighed safe-haven support from geopolitical risks.\u201d They added that while geopolitical risks remain elevated, gold is likely to trade in line with Fed expectations, leaving prices vulnerable to higher yields and a firmer dollar in the near term.<\/p>\n
Gold also faced pressure as concerns over Middle East supply disruptions continued to ease. Investors monitored ongoing U.S.-Iran diplomatic efforts after both sides signaled progress toward implementing a broader peace framework aimed at normalizing energy flows through the Strait of Hormuz.<\/p>\n
However, uncertainty remains over issues including nuclear inspections and access to frozen Iranian funds. Despite these unresolved matters, markets appeared more focused on monetary policy signals than on safe-haven demand.<\/p>\n
Market participants are now awaiting U.S. Personal Consumption Expenditures (PCE) inflation data due on Thursday for further guidance on the Fed\u2019s policy path.<\/p>\n
Among other precious metals, silver prices edged down 0.2% to $61.44 per ounce after dropping more than 5% in the previous session. Platinum eased 0.8% to $1,640.88 per ounce.<\/p>\n
Why are gold prices falling?<\/strong> How much did gold move in the latest session?<\/strong> What are markets expecting from the Federal Reserve?<\/strong> How are other precious metals performing?<\/strong>
Gold prices are declining primarily due to a stronger U.S. dollar and rising expectations of Federal Reserve interest rate hikes, which increase the opportunity cost of holding non-yielding bullion and reduce its appeal.<\/p>\n
Spot gold fell 1.2% to $4,062.72 an ounce, while U.S. Gold Futures dropped 1.7% to $4,079.87 by 23:55 ET (03:55 GMT).<\/p>\n
Markets are pricing in roughly a 70% probability of a rate hike by September and fully pricing in another increase by December, reflecting expectations that the Fed could keep rates higher for longer.<\/p>\n
Silver slipped 0.2% to $61.44 per ounce after a decline of more than 5% in the previous session, while platinum fell 0.8% to $1,640.88 per ounce.<\/p>\n