Prices of gold and the corresponding SPDR Gold Trust (ETF) (NYSEARCA:GLD) could be seen under pressure in the premarket hours as well as Asian and European trading on Monday. Gold is being rattled by recent remarks by the Federal Reserve Chair, Janet Yellen. The Fed chief said at the central bank annual meeting on Friday that the case of a near-term interest rate increase has strengthened.

Another influential Fed official, speaking after Yellen, said that the speech by the Fed Chair is consistent with expectations for two rate hikes in 2016. The remarks have improved investor hopes that the Fed could increase rates as early as next month.

Because higher rates increase the opportunity cost of holding gold, traders can be seen limiting their appetite for the yellow metal after Yellen seemed to favor a near-term rate hike.

The price of gold futures for December delivery cratered to a session low of $1,318.10 a troy ounce in morning trading in Europe Monday. That followed a 0.18% pullback in the price of the precious metal in Asian hours.

Stronger dollar

The U.S. dollar index jumped to a hit a session high of 95.69 on Monday after Yellen’s hawkish comments regarding interest rate review pathway. EURUSD slumped 0.07%, while USDJPY jumped 0.41%. The greenback also advanced against Australian and British counterparts as AUDUSD eased 0.21% and GBPUSD slid 0.30%.

A stronger dollar added to the pressure on gold trading as it made the yellow metal more expensive for foreign buyers.

Yellen’s comment of a stronger case of rate hike is being interpreted by investors as a sign that risks to the U.S. economy have declined and the world’s largest economy can withstand elevated credit costs. However, the Fed will still keep a close eye on the incoming economic data before it eventually reviews rates, and may yet change its mind again as it has many times in the past.