Gold Prices Plunge as Dollar Strengthens Amid Inflation Concerns
Gold prices dropped nearly 1% on Monday as the US dollar strengthened and inflation concerns increased. The gold price fell to $4,336.60 per ounce for October delivery, a decline of $39.10 or 0.9%. This decline was driven by higher energy prices and a lack of signs of any meaningful easing in tensions between Washington and Tehran.
The US dollar index, which measures the performance of the greenback against a basket of six major currencies, rose 0.2% to 99.34. Oil prices jumped more than 2% on Monday after attacks between Washington and Tehran resumed, exacerbating concerns over supplies, amid stalled diplomatic efforts in the Middle East.
Traders estimate an 86.5% probability of a rate hike at the Federal Reserve's meeting on Tuesday and Wednesday, up from around 67% before last week's inflation data. The Bank of Japan is also widely expected to raise interest rates by 25 basis points following its policymakers' meeting on Friday.