Gold Prices Fall Amid Rising Oil Costs and Interest Rate Expectations

Gold prices fell on Monday as rising oil prices heightened inflation concerns and reinforced expectations of further Federal Reserve interest rate hikes.

Spot gold was down 0.7% at $4,254.77 per ounce, while US gold futures drifted 0.7% lower to $4,289.70.

The Fed raised rates earlier this month, lifting its target rate range by a quarter percentage point to between 3.75% and 4%, with traders pricing in a 66% chance of a US rate hike in October.

Cleveland Fed President Beth Hammack said she is concerned that persistently high inflation risks conditioning the American public to accept elevated prices as the norm, adding the central bank cannot let that happen.