Gold Stuck Near $4,400 as Oil Prices Soar and Fed Hike Expectations Grow

Gold prices struggled to push above $4,400 on Wednesday as higher oil prices and Federal Reserve rate hike expectations limited its recovery. The precious metal rebounded from a three-day losing streak but failed to extend its gains.

The US military's destruction of five Iranian crude oil carriers in response to the Islamic Revolutionary Guard Corps' (IRGC) attack on a US Navy warship contributed to higher oil prices, with West Texas Intermediate trading around $93.00 per barrel, near its highest level since June 8. This has increased concerns about inflation and forced major central banks to consider raising interest rates.

The Federal Reserve's next meeting is scheduled for September 15-16, and traders are pricing in a 60% chance of a 25-basis-point rate hike. The US Treasury yield also rose to its highest level since November 2023, further supporting the case for higher borrowing costs.