Gold Prices Slide as Inflation Concerns and Interest Rate Hikes Weigh

Gold prices fell on Monday as concerns about inflation and interest rates weighed on investor sentiment. The precious metal has been in decline for three consecutive weeks, with spot gold down 0.5% at $4,327.80 an ounce by 0119 GMT.

The recent rally in oil prices, driven by fresh Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf, has fueled inflation concerns. This has reinforced expectations that the U.S. Federal Reserve could raise interest rates at its policy meeting this week.

Traders are pricing in about an 86% chance of a U.S. rate hike at the central bank's policy meeting on September 15-16, up from about 67% prior to inflation data last week, according to the CME FedWatch Tool.

Although gold is often seen as an inflation hedge, higher interest rates tend to diminish its appeal to investors.