Gold Slumps Over 3% on Rising Oil Prices and Rate Hike Fears

The price of gold has fallen by over 3% on Monday, touching its lowest point in seven weeks. Spot gold was down 3.1% at $4,155.67 per ounce as of 1031 GMT.

Giovanni Staunovo, an analyst at UBS, attributed the decline to higher oil prices and the increased probability of further US rate hikes. This has led to elevated interest rates and a strong dollar, making gold more expensive for holders of other currencies.

The recent increase in oil prices has driven inflation fears, while the US Treasury yields have extended gains. The CME's FedWatch Tool showed that traders expect a 70.3% chance of a Fed rate hike in October.