Gold Prices Drop Below $4,400 Amid Rising Fed Rate Hike Bets

On this Monday's trading session, gold (XAU/USD) fell below the US$ 4,400 per troy ounce level for a fresh two-week low. This movement primarily reflects rising expectations of Federal Reserve (Fed) interest rate hikes and increased attractiveness of fixed-income assets compared to precious metals. The growing bets on higher Fed rates are driving investors towards more lucrative returns, which has dampened gold's demand as an inflation hedge. Additionally, the escalation of regional tensions in the Middle East also contributed to this trend, given that gold often serves as a safe-haven asset during times of geopolitical uncertainty. This dynamic underscores the interconnectedness between global economic conditions and financial markets, where macroeconomic and geopolitical factors play a crucial role in determining gold prices.