Gold Tumbles Amid Soaring Oil Prices and Rate Hike Fears

Gold prices continue to decline due to high energy prices and expectations of another interest rate hike by the U.S. Federal Reserve. Over the past week, gold lost more than 2% in value, reaching a price of $4,262 per ounce. According to Bloomberg, this marks a 0.5% decrease from the previous day's spot price.

The deadlock surrounding the Strait of Hormuz has contributed to rising oil prices, with Brent increasing by approximately 70% since the beginning of the year. This surge in energy costs is adding pressure on gold and supporting inflation risks. The precious metal mostly traded between $4,230 and $4,510 per ounce in September.

The Federal Reserve's decision to raise its benchmark rate by 0.25 percentage points in mid-September has left investors assessing the probability of another hike in October at approximately 65%. This uncertainty is contributing to gold's decline. The narrowing of the yield spread between 10-year and two-year U.S. Treasury bonds to 17 basis points, the lowest level since the beginning of 2025, is also a signal for the markets.