Gold, silver decline ahead of Fed meeting

Gold prices declined on Wednesday after the US attacked Iranian targets

Gold prices declined during volatile trading on Wednesday as concerns over inflation and the prospect of prolonged high interest rates intensified. The decline came after the US launched new military strikes against Iranian targets, just hours before the release of the Federal Reserve's June meeting minutes.

Meanwhile, the US dollar index—which measures the performance of the U.S. dollar against a basket of six major currencies—held steady at 101.09.

Geopolitical tensions escalated after the US military carried out a new wave of strikes against Iran and revoked its oil export license in response to attacks on three commercial tankers in the Strait of Hormuz, Reuters reported.

As a result, markets increased their expectations of a Federal Reserve interest rate hike at the upcoming September meeting to more than 63%, up from around 57% on Tuesday, according to the CME FedWatch Tool.

Investors are now looking ahead to the minutes of last month's monetary policy meeting for clues about the future path of interest rates under the leadership of the Federal Reserve's new Chair, Kevin Warsh.