Gold Prices Slip on Fed Hike Concerns and Higher Oil
Gold prices kicked off the week on a bearish note due to concerns over a potential Federal Reserve interest rate hike following the strong US employment report. The metal trades around $4,394, down roughly 0.80% on the day, but lacks follow-through selling as weakness in the US Dollar helps limit losses.
The Greenback faces pressure from broad Japanese Yen strength outweighing support from hawkish Fed expectations and geopolitical tensions. Tensions between the United States and Iran continue to simmer, with the US military striking three Iranian crude oil tankers over the weekend.
The conflict provides little support to Gold as markets focus on its inflationary impact through higher energy prices. West Texas Intermediate trades near $90.50 per barrel, close to its highest level since July, adding to inflation risks around the globe.
Looking ahead, Gold is likely to remain sensitive to Fed rate expectations and developments in the Middle East. The US Producer Price Index is due on Thursday, followed by the Consumer Price Index on Friday, with hotter inflation readings reinforcing Fed rate hike expectations.