Gold prices fell more than 1% as expectations of further US interest-rate increases strengthened, boosting the dollar and putting pressure on the non-yielding precious metal.

The decline reflects growing market expectations that the US Federal Reserve could raise interest rates again after policymakers signalled concerns about persistent inflation. Reuters reported that traders had increased their bets on another rate hike, while the dollar strengthened. 

Gold typically comes under pressure when interest rates and bond yields rise because the metal does not pay interest. A stronger dollar can also make gold, which is priced in dollars, more expensive for buyers using other currencies. 

The latest pressure on bullion followed comments from several Federal Reserve officials backing tighter monetary policy amid continuing inflation concerns. The Fed raised its benchmark interest rate to a range of 3.75% to 4% on September 16, while most policymakers indicated that at least one more increase could be needed before the end of the year. 

Reuters reported that spot gold had fallen 1.7% to $4,282.53 per ounce on September 23, while US gold futures for December delivery settled 1.3% lower at $4,318.40.

Market expectations for further rate increases have remained a key factor weighing on gold prices, alongside movements in the US dollar and Treasury yields.