Oil Rally Fuels Rate Hike Bets, Weighing Gold Prices

Gold prices declined by 0.5% to $4,327.09 per ounce on Monday, as oil prices surged over 2% due to fresh Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf.

The rise in oil prices has stoked inflation concerns, boosting expectations that the US Federal Reserve may raise interest rates at its policy meeting this week.

According to Tim Waterer, Chief Market Analyst at KCM Trade, 'Gold isn’t finding conditions to its liking. Rising energy prices plus climbing rate expectations ahead of the Fed and BoJ meetings are delivering a clear yield headwind for gold.'

Data released last week showed US consumer prices accelerated in August, while a key measure of underlying inflation posted its largest increase in four months.