Gold Slumps Below $4,300 as Oil Surge Fuels Rate Hike Bets

Gold prices have retreated below $4,300 per ounce as rising crude oil prices and stronger expectations of a Federal Reserve rate hike weighed on the non-yielding metal.

The surge in Brent crude to around $108 a barrel, driven by Middle East supply concerns and the Saudi pipeline disruption, has added to inflation fears. Higher oil prices are making it harder for central banks to ease monetary policy, which is particularly important for gold as it does not generate interest income.

Spot gold slipped to around $4,290.5 an ounce at about 2:50 pm IST, extending losses after the precious metal had already fallen for three consecutive weeks. The decline comes despite gold remaining up around 16.6% over the past year.