Gold Price Rebounds Amid Higher Oil Prices and US Rate Hike Fears

Gold prices surged by 1.1% on Tuesday to $4,190.10 per ounce, according to US gold futures. This modest recovery follows a sharp sell-off of nearly 4% on Monday to its lowest level since August 5.

Ricardo Evangelista, Director and CEO of ActivTrades, attributed the rebound to 'a rebound following yesterday's sharp sell-off, rather than a fundamental change in sentiment.'

However, analysts point out that higher oil prices and increased probability of further US rate hikes are driving gold's recent weakness. Giovanni Staunovo, analyst at UBS, noted that this backdrop could keep US real yields and the US dollar elevated, raising the opportunity cost of holding non-yielding gold.