Oil Surge and Rate Hike Expectations Slam Gold Prices

Gold prices plummeted on Monday, falling below $4,300 an ounce. On the Multi Commodity Exchange (MCX), gold futures traded at ₹1,52,655 per 10 grams, down ₹129 from the previous close.

The decline is attributed to two main factors: rising crude oil prices and strong expectations of a Federal Reserve rate hike.

Crude oil surged towards four-month highs, reaching $102.62 a barrel, due to Saudi Arabia's shutdown of its East-West pipeline after drone attacks. This has raised concerns about higher energy costs and inflation.

Additionally, markets now see a 90% chance of a 25-basis-point rate hike by the US Federal Reserve this week. Higher interest rates make gold less attractive as it pays no interest.