Gold futures on the New York Mercantile Exchange fell nearly 1% on the 21st, as expectations of further Federal Reserve rate hikes strengthened the US dollar and pushed Treasury yields higher, overshadowing safe-haven demand from Middle East tensions.

The most-active December 2026 gold contract dropped 0.99% to settle at $4,381.00 per ounce, dipping close to the $4,350 level during the session.

The US dollar index gained 0.21% to close at 100.430 in late trading, reflecting broad strength in the greenback. Rising Treasury yields and a firmer dollar negated the safe-haven bids triggered by US-Iran tensions and restricted shipping through the Strait of Hormuz.

The Fed raised its benchmark rate by 25 basis points last week to a range of 3.75%-4.00%, while its dot plot signaled at least one more hike this year. Chicago Fed President Austan Goolsbee noted on the 21st that supply-side shocks could force the central bank to make a "painful trade-off" between employment and inflation.

According to CME's FedWatch tool, the probability of the Fed holding rates steady at 3.75%-4.00% in October stands at 43.5%, while the odds of a 25-basis-point hike are 56.5%. For December, the market prices a 9.7% chance of no change, a 46.4% chance of a cumulative 25-basis-point hike, and a 43.9% probability of a cumulative 50-basis-point increase.

Silver futures for December delivery fell 0.92% to settle at $66.53 per ounce on the same day.