Gold dropped below $4,300 an ounce in trading tied to the September 27 session, as rising oil prices and hawkish Federal Reserve rate-hike bets weighed on the metal. The dollar firmed over the same stretch, a move that typically makes gold more expensive for holders of other currencies and adds to the pressure on bullion.
The oil move stems from the standoff between Iran and the United States over the reopening of the Strait of Hormuz, the narrow waterway that carries a large share of the world's seaborne oil. Iran has said it wants a diplomatic solution after President Trump rejected a peace plan, but no resolution has been reached, and crude has kept climbing on the uncertainty.
The combination is unusual: oil-driven inflation worries would normally support gold as a hedge, but traders appear more focused on the Fed's likely response. Wednesday's PCE inflation data, the Fed's preferred inflation gauge, will be the next test of whether that hawkish rate view holds.