Gold Prices Decline Amid Stronger Dollar and Fed Uncertainty

Gold prices fell for the sixth consecutive session on Wednesday, dropping below $2,610 an ounce, marking their lowest level in nearly three weeks. The decline was primarily driven by a stronger U.S. dollar as market participants adjusted their expectations regarding future interest rate cuts by the Federal Reserve.

Recent minutes from the September meeting of the Federal Open Market Committee (FOMC) revealed a divided stance among policymakers about the magnitude of rate cuts. While some members supported a modest quarter-point reduction, the Fed ultimately delivered a 50 basis point cut. This indecision has led investors to reassess their forecasts, with current market sentiment assigning a 78% probability of a quarter-point rate cut in November.

Further downward pressure on gold prices came from China, as its latest announcements on economic stimulus were vague, offering little clarity or confidence to global markets.

Despite these pressures, gold's allure as a safe-haven asset remains strong, especially in light of escalating geopolitical tensions, particularly the ongoing conflicts in the Middle East. Investors view gold as a hedge against global uncertainties, even amid the current price slump.