Gold prices remained under pressure on Tuesday and are heading for a third consecutive weekly decline as expectations of further US interest rate hikes strengthened.
Spot gold was trading around $4,288 an ounce on Wednesday, after touching a more than one-month low in the previous session. The metal has fallen more than 22 percent from its all-time high of $5,594.82 per ounce hit on January 28 this year.
It stood at $4,333.35, still up about 24 percent over the past 12 months. The latest decline came after US producer prices rose 0.4 percent in August, higher than expected.
Traders have raised bets that the Federal Reserve will hike rates at its meeting this week. A stronger dollar and higher Treasury yields are weighing on bullion, which offers no yield.
Market sentiment has also turned cautious due to rising oil prices, with both major benchmarks back above $100 a barrel for the first time since May after escalating tensions in the Red Sea. The higher oil prices are feeding into inflation expectations, reinforcing the case for tighter monetary policy.
In the South Asian market, gold remains under corrective pressure after failing to sustain gains Major banks have lowered their outlook for gold. UBS now expects near-term prices in the $3,850 to $4,000 range, while OCBC has cut its end-2026 forecast to $4,360 and ING to $4,300 for the third quarter. For now, analysts say any recovery attempt is likely to face resistance, and the near-term bias remains tilted towards further downside unless US inflation data shows a sharper cooling.
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