Oil Rally Sinks Gold Amid Rate Hike Bets Ahead of Fed Meeting
The price of gold fell by 0.3% to US$4,334.31 per ounce on Monday as oil prices surged more than 2% due to ongoing Middle East tensions.
This uptick in energy costs and expectations of a rate hike at the upcoming Federal Reserve policy meeting contributed to inflation concerns, reducing the appeal of gold.
Tim Waterer, chief market analyst of KCM Trade, noted that 'gold isn’t finding conditions to its liking' due to rising energy prices and climbing rate expectations.
The data released last week showed US consumer prices accelerated in August, with a key measure of underlying inflation posting its largest increase in four months.
As a result, traders now price in an 86.5% chance of a US rate hike at the Fed's policy meeting on Tuesday and Wednesday, up from about 67% prior to the inflation data release.