Gold Prices Plummet Amid Hike Expectations

Gold prices plummeted to over a one-month low on Monday, weighed down by expectations of an interest rate hike at this week's US Federal Reserve meeting. The metal fell to its lowest since August 7, with spot gold trading at USD4,271.59 per ounce, a 1.8% drop from the previous day.

The rally in oil prices and stronger-than-expected inflation data on Friday have bolstered expectations of a rate hike, according to Jim Wyckoff, a market analyst at American Gold Exchange. 'We've got crude oil prices that are sharply higher today, which is driving inflation expectations,' he said.

A majority of economists polled by Reuters expect the Federal Reserve to raise its interest rate on Wednesday, with an 89% chance of a hike priced in by traders using the CME FedWatch Tool. The Bank of Japan is also expected to raise interest rates on Friday, amid rising energy prices and little sign of easing Middle East tensions.