Gold Prices Plummet on Oil-Driven Inflation Fears
Gold prices declined on Monday due to rising oil prices and heightened inflation concerns. The price of spot gold fell 0.5% to $4,327.80 per ounce by 0119 GMT, while US gold futures for December delivery dropped about 1% to $4,368.60.
The increase in oil prices, which jumped over 2% on Monday, has intensified concerns over supplies following the closure of a major Saudi oil pipeline. The diplomatic efforts in the Middle East appear to be stalling after a meeting between Iran and other Gulf states was postponed.
According to CME Group's FedWatch tool, traders are pricing in an approximately 86% chance of a US interest rate hike at the Federal Reserve's September 15-16 policy meeting. This is up from around 67% before last week's inflation data was released.
Goldman Sachs still sees upside risks to its forecast for gold to reach $4,900 per ounce by the end of 2026, although it expects price volatility to remain elevated.