Gold Price Sinks on Oil Prices and Rate Hike Expectations

Gold prices fell by over 2% on Monday as rising oil prices fueled inflation concerns and strengthened expectations of further US Federal Reserve interest rate hikes. The spot price of gold dropped to $4,198.10 per ounce, a low of $4,191.40 was also touched during the trading session.

Market participants currently estimate a 66% probability of a Fed rate hike in October, according to CME's FedWatch Tool. This increased expectation of higher interest rates weighed on precious metals, with spot silver falling by 2.6% to $62.64 per ounce and platinum sliding to $1,741.45.

Palladium also declined, dropping to $1,239.95 per ounce as the broader market sentiment remained bearish due to inflation concerns and expectations of further rate hikes.