Gold Prices Plummet Amid Rising Oil Prices and Fed Rate Hike Bets

Gold prices took a hit on Monday, plummeting more than 1% as rising oil prices fueled concerns over persistent inflation. This surge in oil prices has strengthened expectations that the US Federal Reserve could raise interest rates again.

The Fed had already raised its benchmark interest rate by 25 basis points earlier this month, bringing its target range to 3.75%-4%. Higher oil prices have heightened these concerns, weighing on gold as it doesn't generate interest income and tends to lose appeal when interest rates and bond yields rise.

Spot gold fell 1.5% to $4,223.95 per ounce, while US gold futures dropped 1.5% to $4,257.90 per ounce. Among other precious metals, spot silver fell 2.6% to $62.64 per ounce, platinum declined 2.1% to $1,741.45, and palladium dropped 2.1% to $1,239.95.