Gold Prices Plunge on Higher Inflation Expectations

Gold prices plummeted to around $4,331 an ounce on Monday after U.S. inflation data exceeded expectations, sending traders rushing to bet on a Federal Reserve rate hike.

The core consumer price index rose 0.3% month on month in August, pushing the probability of a Fed rate increase this week to 88%, according to market coverage.

As markets priced in higher interest rates, gold's appeal waned due to its lack of yield, causing prices to fall for three consecutive weeks, including an 1.8% drop last week.

Analysts at ANZ and UBS remain bullish on gold, forecasting it to find support by year-end despite the current decline, citing central bank buying, diversification demand, and geopolitical risk.