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Gold falls as Fed rate-hike expectations rise

Gold prices slid after investors increased odds of an October Fed hike, with the US Dollar Index also higher.

Reported · Written up by our desk · Major Pairs

Gold prices dropped more than 1.5% during the North American session on Wednesday, with XAU/USD last trading around $4,285 after earlier reaching $4,369, as traders leaned toward higher rates from the Federal Reserve at the October meeting.

FXStreet said the shift followed hawkish comments from multiple Fed officials, and it pointed to money market pricing that showed October hike odds at 66%, up from 52% the prior day. The outlet also noted that the US Dollar Index (DXY), a measure of the dollar versus six other currencies, was up 0.7% at 101.22, acting as a headwind for gold.

The article also tied the broader setup to market moves in energy, where developments around potential US diesel export limits helped lift West Texas Intermediate, while hopes of de-escalation in the US-Iran conflict supported risk sentiment.

Separately, it referenced a recent Fed decision to raise rates by 25 basis points, alongside commentary that inflation remains above the Fed’s 2% goal, with many officials signaling more tightening could be needed by year end.

Latest closeGold $4,323.20 ▼1.2%|Dollar index 101.16 ▲0.7%

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