Gold: Prices traded near one-month lows below $1,740 an ounce on Tuesday, having faced heavy selling pressure for six straight sessions amid renewed concerns that the US Federal Reserve will continue to aggressively raise interest rates to stamp out inflation.
Last week, several US policymakers offered hawkish statements on the need for further tightening, driving a fresh rally in the dollar and Treasury yields while denting demand for bullion.
Traders are also gearing up for Fed Chair Jerome Powell’s speech at the annual Jackson Hole symposium later this week that could signal how high US borrowing costs may go.
Markets are now pricing in a higher chance of a bigger 75 basis point rate increase in September. While gold is widely considered as a hedge against inflation and economic uncertainty, higher interest rates raise the opportunity cost of holding non-yielding bullion.