Gold Price Plunges Amid Rising Oil Prices and Hawkish Fed Bets

The price of gold has been under pressure in recent days due to rising crude oil prices and upcoming Federal Reserve interest rate decision. Brent, the global benchmark for crude oil, has jumped to $108, up sharply from its July low of $70. West Texas Intermediate (WTI) rose to $103, hovering near its highest level since May 20th.

The ongoing crisis between the United States and Iran is fueling the surge in oil prices. The two sides launched strikes last week, with Iran continuing to target oil tankers attempting to cross the Strait of Hormuz. Iraqi groups have also entered the field, targeting Saudi Arabia's East-West pipeline, forcing it to close.

Rising oil prices are impacting gold as they indicate that US inflation will remain at an elevated level. Data released last Friday showed that headline and core inflation remained above the Fed's target of 2.0%. This means that the Federal Reserve will likely hike interest rates in their upcoming meeting on Wednesday.