Oil-Driven Inflation Fears Send Gold Prices Plummeting

Gold prices have fallen to near $4,350 in early Asian trading on Wednesday as rising oil prices fueled inflation concerns and boosted expectations for a rate hike by the Federal Reserve (Fed) in September.

The US Producer Price Index (PPI) and Consumer Price Index (CPI) data releases later in the day will be crucial in determining whether yields extend higher or retrace, according to Christopher Wong, strategist at Oversea-Chinese Banking Corp.

Markets are pricing in an over 59.4% chance of a Federal Reserve rate increase this month, according to the CME FedWatch tool.

Commerzbank strategists caution that gold is particularly sensitive to any deviation from consensus in the inflation print, as investors reassess the Fed's likely path.