Gold Crashes Below $4300 as Oil Surges and Rate Hike Odds Soar

Gold prices plummeted to their lowest in over five weeks, dipping below $4300 per ounce as oil surged towards its year-to-date high.

The decline was fueled by inflation concerns and pushed US interest-rate expectations to a new high ahead of this week's Federal Reserve meeting, where the odds of a rate rise now stand at 9-in-10.

Market forecasts for the Fed decision have surged from just 1-in-3 last month, according to the CME's FedWatch Tool, with rates expected to finish 2026 up again at 4.12%, implying another rate hike after September.

Nicky Shiels of MKS Pamp noted that 'the market is carrying [a forecast for rate rises of] 50 basis points over Oct/Dec and close to 100bp over the next year, which looks like a stretch.'