Bullion has fallen the most since mid-August.
After US inflation statistics came in hotter than anticipated, gold bars plummeted to their highest level in over a month, adding to the pressure on the Federal Reserve to continue escalating rate increases.
A 75 basis point rate hike was decided in September.
After the announcement, dollar and Treasury yields soared, pushing gold down 1.6%, the most since August 15. The CPI increased by 0.1% in August compared to the prior month.
“Surprising news on sizzling inflation drove gold off the market as investors started pricing in future Fed tightening.” It’s already agreed that rates will rise by 75 basis points in September, and it now appears unlikely that rates will be cut in November, according to Edward Moya, the senior market analyst at Oanda.
Following a 1.6% earlier decline, gold dropped 1.3% to $1,702.96 an ounce in New York trading.
After dropping 0.4% on Monday, the Bloomberg Cellular Dollar Index increased by 1.2%.