Gold Falls to 7-Week Low Amid Oil Price Surge and Rate Hike Bets
Gold plummeted to its lowest in over seven weeks on Monday, falling more than 3% as oil prices surged and inflation fears intensified. The precious metal hit $4,155.67 per ounce at 1031 GMT, its lowest since August 5.
The rise in US Treasury yields and the dollar's strength made gold more expensive for holders of other currencies, further contributing to its decline. Analysts point to higher oil prices and increased bets on future US rate hikes as key drivers behind gold's recent weakness.
UBS analyst Giovanni Staunovo noted that 'higher oil prices and the increased probability of further US rate hikes being priced in by market participants are the main drivers behind gold's recent weakness.' The likelihood of a Fed rate hike in October remains high, with CME's FedWatch Tool showing a 70.3% chance.