Gold Takes a Hit on Rate Hike Bets and Soaring Oil Prices
Gold prices took a hit on Monday, plummeting more than 1% as investors grew increasingly concerned about inflation and Federal Reserve rate hikes. Spot gold dropped to $4,223.95 per ounce, while US gold futures fell by the same margin to $4,257.90.
The sharp decline in gold prices is largely attributed to the recent surge in oil prices, which has heightened inflation concerns among investors. This, combined with the Federal Reserve's decision to raise interest rates earlier this month, has created a perfect storm for gold prices.
Tim Waterer, chief market analyst at KCM Trade, noted that 'the high bond yields and high oil price tandem continues to act as a thorn in gold's side.' He added that stronger-than-expected inflation or employment numbers could keep upward pressure on bond yields and weigh further on gold.