Gold Tumbles Below $4,300 as Oil Surge Fuels Rate-Hike Bets
Gold prices slipped below $4,300 an ounce on Monday as investors braced for the Federal Reserve's policy decision later this week. Spot gold fell to around $4,290.5 an ounce, down from its recent highs of August and September.
The decline comes despite gold's strong performance over the past year, with prices still up about 16.6 percent. However, the metal had climbed above $4,600 an ounce in recent weeks, leaving it vulnerable to profit-taking as investors reassess the outlook for interest rates and inflation.
A fresh surge in crude oil prices has added pressure on gold. Crude oil prices surged towards four-month highs after Saudi Arabia shut its key East-West pipeline following drone attacks. The disruption, alongside wider supply and shipping risks stemming from the Middle East conflict, has revived concerns that higher energy costs could keep global inflation elevated.
The latest US inflation data has reinforced those concerns, with consumer prices rising 0.4 percent in August and annual inflation standing at 3.4 percent. Markets are now pricing in roughly a 90 percent probability of a 25-basis-point rate hike on Wednesday, according to Reuters.