Gold Tumbles to Eight-Week Low as Oil Prices Fuel Inflation Fears

Gold prices plummeted to an eight-week low on Monday as a surge in oil prices fueled inflation concerns and reinforced expectations of further Federal Reserve interest-rate hikes. The precious metal fell 2.7% to $4,171.85 per ounce, its lowest since early August.

The rise in bond yields and high oil prices are acting as a significant obstacle for gold, said Tim Waterer, chief market analyst at KCM Trade.

Investors will be watching US labour market and inflation data this week, including job openings, the ADP employment report, the Personal Consumption Expenditures (PCE) price index, and nonfarm payrolls. Stronger-than-expected inflation or employment numbers could keep upward pressure on bond yields and weigh further on gold.