Gold Tumbles to September Lows as Rate Hike Bets Intensify

Gold prices have retreated to September lows as investors anticipate a Federal Reserve rate hike. Spot bullion is trading between $4,282 and $4,332 per ounce, down over 3% this month after exceeding $4,700 in late August.

The likelihood of the Fed increasing rates has risen to 92%, with market participants expecting the central bank's first rate increase since 2023. This move would be a significant shift in monetary policy, and investors are closely watching for signs of hawkish rhetoric from the Federal Reserve.

The energy crisis is also weighing on gold prices, with elevated crude prices contributing to inflation worries and bond yields climbing to their highest point in sixteen years at 5.04%. The Saudi Arabia's east-west oil pipeline outage has amplified concerns about supply disruptions, further supporting oil prices and inflation anxieties.