Gold Volatility Spikes Amid $105 Oil, Rising Interest Rates

Gold's price has been volatile in recent days due to rising energy prices and increasing expectations of another Federal Reserve rate hike. The US producer-price index rose 0.4% in August, reinforcing concerns that inflation remains persistent. This has led traders to raise the implied probability of a Fed rate increase at next week's meeting to approximately 70%, from 62% before the data.

Spot gold traded around $4,358 per ounce on Thursday, while Brent crude reached approximately $105 per barrel amid escalating threats to global shipping and energy supplies. The US dollar and Treasury yields also moved higher, adding pressure to non-yielding gold.

The Federal Reserve is scheduled to meet September 15-16. 'Gold is facing one of the most unusual market environments of 2026,' said Joseph, Founder and CEO of Limitless Metals. 'Higher Treasury yields and increasingly hawkish Federal Reserve expectations are creating a significant short-term headwind for gold.'

Despite this challenging environment, investment demand for gold strengthened dramatically in August, with global gold-backed ETFs attracting approximately $18 billion, the second-largest monthly inflow by value on record.