Gold price today: Why gold fell to $4,350 as stronger dollar and 88% Fed rate hike odds weigh on bullion

Gold price today: Gold prices dropped on Monday, September 21, as a stronger U.S. dollar and rising expectations of another Federal Reserve interest-rate hike weighed on bullion.

Gold Price Today September 21: Spot Gold at $4,350.39

Spot gold was down 0.6% at $4,350.39 an ounce by 11:40 a.m. ET, after falling to a session low of $4,322.19 earlier in the day, according to Reuters. U.S. gold futures were down 0.8% at $4,388.40.

The decline came as investors assessed the outlook for U.S. monetary policy following the Federal Reserve's rate increase last week, while also monitoring inflation, the dollar and geopolitical developments.

Why Is Gold Price Down Today

The stronger U.S. dollar was one factor weighing on gold on Monday. Because bullion is priced in dollars, a stronger greenback can make gold more expensive for buyers using other currencies.

Reuters reported that the dollar extended its gains after rising more than 1% last week. Jim Wyckoff, a market analyst at American Gold Exchange, pointed to concerns among gold-market bulls about tighter U.S. monetary policy and the dollar's strength.

Higher interest rates can also reduce gold's relative appeal because the metal does not pay interest or dividends. Traders were pricing in an 88% chance of another U.S. rate hike in December, according to the CME FedWatch probability cited by Reuters.

Fed Rate Hike Bets Keep Gold Under Pressure

The Federal Reserve raised interest rates last week, and investors are now watching whether policymakers could tighten monetary policy again later this year.

Reuters reported that Minneapolis Fed President Neel Kashkari said inflation remained too high across sectors of the U.S. economy and was not limited to the effect of higher oil prices. His comments kept attention on the inflation outlook as traders assessed the path for interest rates.

Expectations for further rate increases can be significant for gold because higher yields may make interest-bearing assets relatively more attractive than non-yielding bullion.

Gold Price Today September 21: Spot Gold at $4,350.39

Middle East Conflict Keeps Inflation and Oil in Focus

Geopolitical developments also remained part of the market backdrop on Monday, although the day's gold decline should not be attributed solely to the conflict.

Reuters reported that the U.S.-Israeli conflict with Iran had pushed energy prices higher, adding to inflation concerns and reinforcing expectations for restrictive monetary policy. At the same time, oil prices moved lower on Monday amid developments surrounding the conflict.

The combination left investors watching several factors at once, including oil prices, inflation expectations, interest rates and the U.S. dollar.

Gold Price Outlook: What Traders Are Watching

The direction of U.S. interest rates and the dollar remains important for gold prices as traders assess the Federal Reserve's next moves.

TD Securities analysts said any near-term weakness in precious metals was likely to be modest and could represent a buying opportunity for gold. That is the firm's market view and does not establish how prices will move in the future.

Reuters also reported that gold was about 17% below its February 27 session high.

Silver, Platinum and Palladium Prices Today

Other precious metals were mixed on September 21. According to Reuters, spot silver was down 0.1% at $66.14 an ounce, while platinum gained 0.2% to $1,803.67 and palladium rose 0.4% to $1,306.93.

The moves came as investors continued to assess interest-rate expectations, the U.S. dollar, inflation and geopolitical risks.

What Is XAU/USD

XAU/USD is the market quotation for gold priced in U.S. dollars. XAU represents one troy ounce of gold, while USD represents the U.S. dollar.

The pair is widely used to track international spot gold prices and is closely watched alongside the dollar, interest rates, inflation expectations and broader financial-market conditions.