According to FedWatch Tool, the probability of a rate hike at the next meeting in October has increased to 70.3%. Traders expect that the federal funds rate would be raised by 100 bps by the end of 2027. Expectations of a series of rate hikes put significant pressure on gold that pays no interest.

U.S. dollar gained some ground against a broad basket of currencies as forex traders focused on developments in debt market. Stronger dollar put additional pressure on gold in today’s trading session.

I’d note that one of the reasons for the sell-off in gold markets could be technical. The strong pullback in debt markets could have forced investors to raise cash elsewhere, forcing them to sell gold.

Currently, gold is trying to settle below the support level at $4160 – $4180. In case gold manages to settle below the $4160 level, it will head towards the next support, which is located in the $4000 – $4020 range. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.