Gold Tumbles Below $4,300 as US Rate Hike Odds Surge

Gold prices slipped below $4,300 an ounce on Monday as expectations of a US interest rate hike strengthened. The metal's value has been weighed down by the prospect of higher borrowing costs, which make gold more expensive for buyers using other currencies.

The latest inflation data from the US was hotter than expected, increasing the likelihood of a Federal Reserve rate increase at its policy meeting this week. Traders are now pricing in an 89% probability of a hike, up from around 67% before the release of the new figures.

Goldman Sachs and HSBC expect a 25 basis-point move if rates do rise, which would further erode gold's value. Brent crude oil prices have also surged above $108 a barrel due to increased tensions in the Middle East, potentially providing another reason for the Fed to maintain a hawkish stance.