Fed Rate Hike Expectations Sink Gold Prices Amid Rising Oil Costs

Gold prices have taken a hit as investors anticipate potential rate hikes from the U.S. Federal Reserve, causing its appeal to wane. The price of gold has declined in response to increased expectations of higher interest rates, which typically increase the opportunity cost of holding non-yielding assets like gold.

The 30% chance of a rate hike at the Fed's July meeting and an 80% chance by September have contributed to this downward trend. Markets are pricing in significant Fed actions, which could further influence gold prices negatively.

Meanwhile, Brent crude oil prices have risen above $100 per barrel, maintaining pressure on inflation and supporting a hawkish policy stance from the Federal Reserve.