Spot gold retreated on Tuesday, pressured by a strengthening U.S. dollar and growing market expectations that the Federal Reserve may raise interest rates later this year.
The precious metal fell 0.7% to trade at $4,162, extending a downward trajectory that has seen the asset trade near its lowest levels in recent weeks.
The sell-off reflects a repricing of the macro environment, with investors increasingly factoring in a hawkish pivot from the U.S. central bank.
Higher interest rates typically erode the appeal of non-yielding assets like gold, while a firmer dollar adds further headwinds for the commodity priced in greenbacks.
Markets are now focused on the Federal Reserve’s policy meeting next week.
While the central bank is widely expected to hold rates steady, the accompanying statement and dot plot will provide critical clues on the timing and magnitude of potential future hikes.