Gold Falls Amid Rising Oil Prices and Higher Interest Rate Expectations

Gold prices declined on Tuesday as investors positioned themselves ahead of key US inflation data that could influence the Federal Reserve's next interest-rate decision. Spot gold fell 0.3% to $4,390.50 per ounce by 0816 GMT, after rising as high as $4,442.70 earlier in the session.

Nikos Tzabouras, Senior Market Analyst at Tradu.com, said gold was trading cautiously as investors weighed expectations of higher US interest rates against a softer US dollar. Higher oil prices stoke inflation risks and expectations for Fed rate hikes, putting the precious metal under pressure.

The data strengthened expectations that the Federal Reserve could raise interest rates at its next policy meeting, with markets now pricing in roughly a 60% chance of a rate increase compared to about 50% before the jobs report. A weaker US dollar helped limit losses by making dollar-denominated gold more affordable for overseas buyers.