Prices of the yellow metal plunged close to 2 percent on Wednesday as fears of further tightening by the Fed engulfed world markets. Stock markets and commodity markets too reflected the anxiety and traded deep in the red.
Data from U.K. which showed inflation persisting in double digits and hawkish comments from ECB officials added to the negative outlook for the precious metal.
Annual inflation in the U.K recorded 10.1 percent, dropping from 10.4 percent but much higher than 9.8 percent that markets were expecting. Core inflation was steady at 6.2 percent versus expectations of a fall to 6 percent.
The Dollar Index (DXY), a measure of the Dollar's relative strength against a basket of six currencies surged 0.38 percent overnight to 102.13. The day's range was between a low of 101.66 and a high of 102.23.
Gold Futures for June Settlement shed 1.73 percent to trade at $1,984.85. The day's trading range has been between $1,981.05 and $2,020.25.
Spot Gold has lost 1.59 percent to trade at $1,973.37 per troy ounce. The day's trading range has been between $1,969.39 and $2,008.21.
