Oil Surge Sends Gold Tumbling Amid Inflation Fears

Gold prices plummeted on Monday as oil markets surged, intensifying inflation fears and bolstering the case for a US Federal Reserve interest rate hike at this week's policy meeting.

The spot gold price fell 0.61% to $4,321.59 an ounce by 11:58 am PST, according to data from Mettis Global.

The decline follows last week's release of US consumer price data, which showed inflation picking up pace in August with core price growth posting its sharpest rise in four months.

Market pricing now reflects an 86.5% probability of a Fed rate increase at its upcoming meeting, significantly higher than the roughly 67% odds seen before last week's inflation print.