Oil Surge Fuels Inflation Fears, Gold Prices Slip

Gold prices dropped slightly on Tuesday as oil prices rose to multi-week highs, reigniting inflation fears and increasing expectations of Federal Reserve interest-rate hikes.

The precious metal's value has been under pressure due to higher oil prices, which stoke inflation risks and boost bets on Fed rate hikes, according to Nikos Tzabouras, a senior market analyst at Tradu.com.

Spot gold fell 0.1% to $4,400.66 per ounce by 11:48 GMT, after rising as much as $4,442.70 earlier in the session. US gold futures for December delivery dropped 0.7% to $4,445.20.

Tzabouras noted that gold trades cautiously, caught between Fed rate hike bets and dollar softness.

Investors are now awaiting key data releases this week, including the US producer price index on Thursday and the consumer price index on Friday, which could offer clues on the Fed's monetary policy stance.