Gold prices fell Tuesday, as investors considered the possibility of additional interest rate rises by the Federal Reserve ahead of a policy decision. Spot gold fell 0.3 percent to $4,125.90 an ounce, while December US gold futures tumbled 0.4 percent to $4,142.60 an ounce.

Gold is now facing two narratives – continued inflation and rising interest rates, which are registered by market strategists. With the current economic climate, bonds issued by the U.S. Department of the Treasury are looking more appealing to investors than precious metals that do not pay a yield. But the $4,000 mark is being closely monitored by analysts to see whether the precious metal can sustain its critical support level.

Recent central bank comments indicate that there is not a great deal of urgency for further rate hikes at the meeting on Oct. 27-28, after the bank raised rates by a quarter-point in September. But available financial tracking tools run by the CME Group show that traders are currently hedging for a 92% chance that another rate hike is still to come in December.

Gold has a proven track record of being a sound inflation hedge, but not necessarily in periods of high interest rates. The metal has fallen about 26% from its January high of $5,594.82 and bested barring the Iran war, when it rallied about 22% from its lows.

The focus is now shifting to the next BEA report, the Personal Consumption Expenditures (PCE). This is the preferred inflation measure for the central bank, and will offer signs of the continued intensity of domestic inflation pressures and directly influence upcoming inflation forecasts.

Globally, monetary policies are also reflecting these global economic changes. The Bank of Japan’s Governor, Kazuo Ueda, recently signalled that underlying inflation is moving closer to their 2% target abroad, suggesting more rate hikes ahead. Meanwhile, in broader metals trading, spot silver rose 1.4% to $57.86 per ounce, platinum gained 1% to $1,656.85, and palladium dropped 1.3% to $1,105.50.