Gold Tumbles as Oil Prices Fuel Inflation Concerns and Rate Hike Bets

Gold prices plummeted more than 1% on Monday as higher oil prices fueled inflation concerns and strengthened expectations that the US Federal Reserve could raise interest rates again.

The spot gold price dropped to $4,223.95 per ounce, a 1.5% decline from previous levels, while US gold futures fell to $4,257.90 per ounce, also down 1.5%

The rise in oil prices has heightened concerns over persistent inflation, which is expected to lead to tighter monetary policy and weigh on gold. As gold does not generate interest income, it tends to lose appeal when interest rates and bond yields rise.

Earlier this month, the Federal Reserve raised its benchmark interest rate by 25 basis points, bringing its target range to 3.75%-4%.