Gold Prices Tumble as Oil Soars and Rate Hike Expectations Rise

Gold prices edged lower on Tuesday as rising oil prices fueled inflation concerns and boosted expectations for a September Federal Reserve rate increase. Spot gold fell 0.2% to $4,396.19 per ounce by 09:44 a.m. EDT (1344 GMT), while US gold futures for December delivery dropped 8% to $4,441.30.

Rising oil prices are raising inflation worries and supporting expectations for a September rate hike, said Peter Grant, vice president and senior metals strategist at Zaner Metals. Brent crude neared the $100-per-barrel mark, touching $99.46, its highest level since July 24.

The market continues to absorb the stronger-than-expected US jobs report and await upcoming CPI and PPI data. Traders are now pricing in about a 60% chance of an interest rate hike at the central bank's policy meeting, according to the CME FedWatch Tool, up from about 50% before the data.