FX.co ★ Gold Extends Losses as Hawkish Fed Signals Point to Higher Rates

Gold prices slipped to around $4,330 an ounce on Tuesday, extending the previous session’s losses as hawkish remarks from Federal Reserve officials strengthened expectations that US interest rates will stay elevated for an extended period. The Fed raised its policy rate by 25 basis points last week, its first such increase in three years, and Chair Kevin Warsh indicated that additional hikes are possible in the coming months. Other policymakers, including St. Louis Fed President Alberto Musalem and Chicago Fed President Austan Goolsbee, also underscored the need for further tightening to rein in inflation driven by robust demand and higher energy costs. According to the CME FedWatch Tool, markets are now assigning roughly a 90% probability to another rate increase in December. Meanwhile, oil prices declined for a fifth straight session after reports suggested Iran could reopen the Strait of Hormuz within seven days if the US takes initial steps to ease military pressure.