A sea of red decorated the trade at the beginning of the week where the precious metal gold was no exception to plunge more severely in the Asian session after being affected by the statement of the Chairman of the Federal Reserve (Fed) Jerome Powell.
In a speech in Jackson Hole last Friday, Powell insisted the central bank would continue to raise interest rates to stop inflation from becoming a permanent feature of the United States economy.
Not only that, but high interest rates may be maintained for some time to ensure inflation falls closer to the central bank's 2% target.
His remarks spurred a rally in stock markets and major currencies, while the US dollar soared to a new 20-year high.
Meanwhile, gold traded lower in the Asian session, trading at a one-month low of $1,723 per ounce.
The yellow metal was down more than 1% last Friday and continued to decline further in the Asian session today.
Although Powell admitted that high interest rates will affect households and businesses in America, but it is a 'pain' that needs to be borne and the Fed's main focus is to restore price stability.
Although gold is widely regarded as a hedge against inflation and economic uncertainty, higher interest rates have caused the yellow metal to lose its appeal.
