Gold Slumps Ahead of Fed Decision Amid Rising Oil Prices

Gold prices have taken a hit today, declining by about 0.75% to around $4,266 per ounce as investors prepare for the Federal Reserve's decision on interest rates.

The market is pricing in over three rate hikes by June 2027, according to Bloomberg Finance LP and XTB.

However, gold's long-term prospects remain tied to inflation expectations and fiscal risks in the US, rather than short-term interest rates.

Rising oil prices have complicated the situation, as higher commodity prices boost inflation expectations but also increase the likelihood of Fed rate hikes, which is detrimental to gold in the short term.