Oil Price Surge Sends Gold Tumbling Amid Fed Rate Hike Bets

Gold prices took a hit on Tuesday as oil prices rose to multi-week highs. This increase in oil prices is raising concerns about inflation, which could lead the Federal Reserve to maintain or even hike interest rates. Spot gold fell 0.3% to $4,390.50 per ounce by 0816 GMT.

The main pressure on gold comes from higher oil prices and growing bets that the Fed could raise interest rates. Higher oil prices can increase inflation expectations, making it less likely for investors to hold gold as a hedge against inflation.

Nikos Tzabouras, a senior market analyst at Tradu.com, said 'gold trades cautiously today, caught between Fed rate hike bets and dollar softness.'