First, gold is a commodity, and the international gold price settlement and pricing currency is still the US dollar. This means that there will be a negative correlation between gold and the dollar. The interest rate hike in the US dollar means that the interest income of the holders of the US dollar will increase and the US dollar will become more attractive. In this case, dollar holders are likely to choose to buy dollars and sell gold, thus putting pressure on the price of gold. In fact, in the last round of the Fed's interest rate hike cycle, the international gold price once fell from 1.400 USD/oz to a low of 1.654.38 USD/oz. After the Fed stopped raising interest rates, the international gold price began to rebound gradually. This phenomenon has already told us that the gold price is likely to go out of the weak trend in the environment of the Fed raising interest rates.
Second, gold is not an interest-bearing asset, but a commodity. This attribute makes gold expose its own shortcomings in the stage of raising interest rates in the US dollar. After all, investors will get a certain percentage of dollar interest when they put dollars into their accounts, but they will not get an extra share of gold because they hold gold in their accounts. Once the dollar raises interest rates continuously, the attraction of gold to people will become weaker and weaker, which makes it more likely that the price of gold will fall.
However, there is a premise that the interest rate increase of the US dollar leads to the price reduction of gold. This premise is that the Fed must continue to raise interest rates, forming an expectation in the financial market that "most people think that interest rate hikes will continue". If the Fed only raises interest rates once in a while, its impact on gold prices will be unsustainable.
In addition, the domestic gold price denominated in RMB may be out of sync with the international gold price. Since the exchange rate of RMB against the US dollar will change as the US dollar raises interest rates. At some point, the depreciation of RMB can offset a large part of the decline in international gold prices (in billions of dollars). In this case, the impact of the US dollar interest rate hike on the domestic gold price will be more complicated.