Gold Prices Rise Amid Higher Oil Costs and US Interest Rate Hike Expectations

The price of gold is rising as it approaches $4,325, but still trades down 3% this month due to increasing oil prices and higher Treasury yields. Oil prices have surpassed $109 amid concerns about supply disruptions in the Middle East following Saudi Arabia's East-West pipeline outage.

Rising yields are also affecting gold, with the 10-year Treasury yield reaching its highest level in 19 years above 5%. This has led to a loss of appeal for non-yielding assets like gold and has helped the US dollar recover in trading.

The market is expecting a 25 basis point interest rate hike from the Fed today, which would take rates to 3.75-4%. The Fed's decision will also provide clues about future monetary tightening. Central bank gold purchases are another factor to watch, with China increasing its buying in recent months.