Gold Near Seven-Week Low Amid Rate Hike Concerns

Gold prices hovered near a seven-week low on Tuesday as investors awaited US economic data and concerns grew that the Federal Reserve may keep interest rates higher for longer.

The spot price of gold was little changed at $4,123.29 per ounce, after hitting its lowest level since August 5 in the previous session. US gold futures fell 0.3% to $4,155.50.

Elevated oil prices can fuel inflation by increasing costs across the economy, potentially prompting central banks to raise interest rates to keep price pressures in check. Despite its reputation as an inflation hedge, gold tends to struggle in a high-rate environment as investors favor assets that generate yield.