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Gold drops as dollar remains firm amid Fed rate hike expectations

Gold drops as dollar remains firm amid Fed rate hike expectations
Gold drops as dollar remains firm amid Fed rate hike expectations

The?U.S. dollar was stronger on Tuesday and this pushed gold prices down?more that 1%. ?dollar fell?more than 1% on Tuesday,?pressured by a firmer 'U.S.

As of 0414 GMT, spot gold was down by 1.1%, at $4,142.61 an ounce. U.S. Gold Futures for August Delivery fell 1% to $4160.20.

Tim Waterer is the chief market analyst at KCM Trade. He said that while gold had received some relief this week from lower oil prices, it was not getting any help from the U.S. Dollar, which "continues" to rise on expectations of Fed interest rate hikes.

Gold is less affordable for buyers who hold other currencies because the dollar has remained near its one-year high.

After the first talks in a new peace agreement, the United States lifted sanctions against Iran for 60 days starting Monday. Meanwhile, officials in Lebanon reported that fighting has slowed down under the agreement.

JD Vance, the U.S. vice president, said that talks with Iranian officials held in Switzerland laid a solid foundation for a peace agreement. Iran has denied having begun to discuss its nuclear program.

Chicago Fed President Austan Goolsbee stated that the labor market is stable and that he's focused on determining whether the too-high rate of inflation will remain that way or if it will decline as the effects of high tariffs wear off, and if there's a resolution to the Middle East conflict.

CME FedWatch Tool shows that traders now expect an 88% probability of a rate increase in December. This is up from 61% prior to the Fed meeting held last week.

Investors are watching U.S. The Fed's preferred inflation gauge, Personal Consumption Expenditures, is due this week. This data will provide further monetary policy clues.

Silver spot fell by 3.3%, to $63.05 an ounce. Platinum dropped 1.9%, to $1,646.30 and palladium declined 1.8%, to $1,242.75. (Reporting by Pablo Sinha in Bengaluru; Editing by Subhranshu Sahu)

(source: Reuters)