Gold falls to seven-month low below $4,000 on rising Fed hike bets, traders brace for US PCE data

Gold price (XAU/USD) tumbled to around $3,995 during the early Asian session on Thursday, extending its decline below the $4,000 psychological level for the first time in seven months. This sharp drop in gold prices is largely attributed to rising bets on a potential interest rate hike by the Federal Reserve, as investors weigh the prospects of a more aggressive monetary policy. As the market prepares for the upcoming US Personal Consumption Expenditures (PCE) data release, traders are bracing for the potential impact on interest rates and the overall economic landscape. The PCE data is closely watched by the Fed, and a strong reading could further solidify expectations for a rate hike, exacerbating the decline in gold prices. With the precious metal's value closely tied to interest rates, a sustained decline below $4,000 could have significant implications for investors and market participants alike.