Gold Falls on Oil Rally and Rate Hike Bets

Gold prices dipped on Monday as oil surged over 2% due to fresh Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf, heightening supply concerns.

This increase in energy prices fueled inflation expectations, boosting bets that the U.S. Federal Reserve will raise interest rates at its policy meeting this week.

According to Tim Waterer, chief market analyst at KCM Trade, 'Gold isn't finding conditions to its liking. Rising energy prices plus climbing rate expectations ahead of the Fed and BoJ meetings are delivering a clear yield headwind for gold.'

U.S. consumer prices accelerated in August, while a key measure of underlying inflation posted its largest increase in four months.