Gold Near Seven-Week Low as Fed Rate Hike Fears Mount

Gold prices remain near a seven-week low as investors worry about potential interest rate hikes by the Federal Reserve. Despite its reputation as an inflation hedge, gold tends to struggle in high-rate environments where assets generating yield are favored.

The spot price of gold hovered at $4,123.29 per ounce on Tuesday, with US gold futures falling 0.3% to $4,155.50.

Elevated oil prices can fuel inflation and prompt central banks to raise interest rates, which could further weaken gold's appeal.

The market currently sees a 70.3% probability of a Fed rate hike in October, according to the CME's FedWatch Tool.