Gold Crashes Over 2% as Oil Prices Surge and Inflation Fears Rise

Gold prices plummeted more than 2% on Monday due to rising oil prices and heightened inflation concerns, making it the lowest since early August. Spot gold dropped 2.7% to $4,171.85 per ounce as of 0627 GMT. US gold futures also fell by 2.7% to $4,204.30.

Tim Waterer, chief market analyst at KCM Trade, said that the high bond yields and oil prices are acting against gold. Oil prices rose on mixed signals about oil flows, keeping inflation in focus for investors. Higher energy prices can fuel inflation by increasing costs across the economy, which is a concern for gold investors.

The Federal Reserve raised interest rates earlier this month, and traders now expect a 69% chance of another rate hike in October. A high-interest rate environment increases the opportunity cost of holding non-yielding metals like gold. Investors will closely watch US labour market and inflation data released this week, which could impact bond yields and gold prices.