Gold Prices Slide as Oil Gains Strengthen Case for Rate Hikes
Gold prices fell on Tuesday as rising crude oil prices and inflation worries pushed expectations for elevated interest rates ahead of the Federal Reserve's policy meeting. Spot gold was down by 0.3% at $4,285.91 per ounce, while U.S. gold futures for December delivery were down 0.6% at $4,326.90.
The Fed is expected to raise its benchmark rate a quarter of a percentage point to a 3.75%-4.00% range and signal further tightening ahead. Financial markets are betting heavily on this outcome following data that showed U.S. consumer prices accelerated in August and a key measure of underlying inflation posted its largest increase in four months.
Oil prices continued their gains, with concerns over global oil supplies due to the Middle East conflict. Higher energy costs can fuel inflationary pressures across the economy, making gold less appealing when rates increase as they raise the opportunity cost of holding non-yielding bullion.