Gold falls under pressure from strong dollar
Gold prices declined as the US dollar remained strong and investors assessed expectations surrounding the Federal Reserve's (Fed) interest rate policy.
Spot gold fell 0.2% to $4,164.45 per ounce, while US gold futures for December delivery slipped 0.1% to $4,187.90. With the dollar trading near an 18-month high, selling pressure weighed on gold as investors turned their attention to upcoming US inflation data.
Markets are awaiting Wednesday's US Consumer Price Index (CPI) report and Thursday's Producer Price Index (PPI) figures. According to CME FedWatch data, investors are pricing in a 21% probability of a Fed rate hike in October and an 88% probability in December. Cleveland Fed President Beth Hammack's call for tighter monetary policy also reinforced interest rate expectations. Higher interest rates are generally seen as reducing the appeal of non-yielding assets such as gold.
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