Gold futures fell to their lowest in nearly 16 months on Wednesday, as the U.S. dollar edged higher following a brief pullback.
Front-month Comex gold (XAUUSD:CUR) for July delivery settled -0.6% to $1699.50/oz, its lowest settlement value since March 30, 2021, and off 16.7% from its 52-week high of $2,040 on March 8, 2022.
Front-month Comex silver (XAGUSD:CUR) closed -0.2% to $18.639/oz, its third-lowest settlement this year.
While gold is considered as a hedge against inflation, analysts say the metal is hostage to rate-hike expectations due to its zero-yielding nature.
The metal had opened the week higher on reduced fears of a full percentage point Fed rate hike by the Fed, but it has failed to attract safe-haven flows as investors preferred the dollar.
"Gold, and every market for that matter, is reacting to the stark reality of a Fed seemingly intent to tighten into a recession," Gold Newsletter editor Brien Lundin said.
Forex.com's Fawad Razaqzada said recently that "ultimately, the dollar has to stop rising before we see gold make a meaningful comeback."