Gold Prices Slip as US Inflation Data Fuels Fed Hike Bets

The price of gold slipped on Monday as hotter-than-expected US inflation data increased expectations that the Federal Reserve will raise interest rates later this week. The core consumer price index rose 0.3% month-on-month, excluding food and energy costs.

This added to expectations that the Fed could deliver its first rate hike in three years at this week's meeting, with markets now pricing roughly an 88% probability of a September rate increase.

A rate increase could weigh on gold, as it generates no interest, making yield-producing assets more attractive. However, ANZ remains constructive on gold despite expectations for further monetary tightening.