Gold Prices Plummet Over 1% on Inflation Concerns

Gold prices plummeted over 1% on Monday as investors became increasingly concerned about inflation and potential Federal Reserve interest rate hikes. The rise in oil prices has exacerbated these worries, making it difficult for gold to shine.

The spot price of gold fell to $4,223.95 per ounce, while US gold futures dropped to $4,257.90. According to Tim Waterer, chief market analyst at KCM Trade, 'the high bond yields and high oil price tandem continues to act as a thorn in gold's side.'

Oil prices surged after Iran stated that only diplomacy could solve its conflict with the US and Israel. This led to concerns about inflation, which gold is traditionally seen as a hedge against. However, high interest rates make holding non-yielding metals like gold less attractive.

Investors will be watching closely for upcoming US labour market and inflation data, including job openings, the ADP employment report, and nonfarm payrolls. A stronger-than-expected reading could further weigh on gold prices.