Gold Prices Plummet as Oil Costs Fuel Inflation Fears

Gold prices plummeted to their lowest in over seven weeks on Monday, losing more than 3% of its value. The metal's price hit $4,155.67 per ounce, a level not seen since August 5. US gold futures for December delivery also fell by the same margin to $4,188.10.

The sharp decline in gold prices is attributed to rising oil costs and increasing inflation fears, which have boosted bets on higher interest rates from the Federal Reserve. UBS analyst Giovanni Staunovo noted that 'higher oil prices and the increased probability of further US rate hikes being priced in by market participants are the main drivers behind gold's recent weakness.'

The dollar held firm, making greenback-priced bullion more expensive for holders of other currencies. US Treasury yields also continued to rise, further contributing to gold's decline. As a result, the precious metal has become less attractive as an investment option.