COMEX gold fell $62.60, or 1.46%, to $4,223.80 per ounce. COMEX silver declined $0.31, or 0.48%, to $64.93 per ounce.
The weakness in precious metals came as the US dollar strengthened and oil prices rose following renewed tensions in the West Asia. Higher crude oil prices have fuelled concerns that inflation could remain elevated, prompting markets to reassess the outlook for US interest rates.
Traders are now pricing in a more than 70% probability of a Federal Reserve rate hike by December, according to CME FedWatch estimates. Higher interest rates typically reduce the appeal of non-yielding assets such as gold and silver.
Investors are awaiting US Consumer Price Index (CPI) data due later in the day and Producer Price Index (PPI) figures scheduled for Thursday (June 11) for further clues on the trajectory of inflation and monetary policy.
Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions and President of the India Bullion and Jewellers Association, said gold and silver were consolidating near important support levels as markets weighed geopolitical developments against rising interest-rate expectations. He added that upcoming US inflation readings are likely to be the next key trigger for bullion prices.
Market participants will closely monitor inflation data and signals from central banks, including the Federal Reserve and the European Central Bank, for direction in precious metals markets.
–With Reuters inputs
