Gold Prices Pressured by Oil and Interest Rates
Gold prices declined on Monday, pressured by energy costs and potential monetary policy moves by central banks.
Gold recorded a decline on Monday as rising oil prices triggered inflation concerns and expectations of potential interest rate hikes by the US Federal Reserve strengthened.
Loss of Value in Markets
Spot gold fell 0.3% to $4,334.31 per ounce on Monday, following its third consecutive weekly decline on Friday. US gold futures also dropped 0.8% to $4,375.
KCM Trade Chief Market Analyst Tim Waterer stated that gold is currently not finding favorable conditions for itself and that energy prices and interest rate expectations are creating yield pressure.
Central Banks and Inflation
Consumer prices in the US accelerating in August and core inflation recording its highest increase in four months have boosted expectations that the Fed will raise interest rates.
According to CME FedWatch Tool data, investors are pricing in an 86.5% probability of the Fed raising interest rates at its meeting. Additionally, the Bank of Japan is expected to raise interest rates on Friday.
Supply Concerns and Oil
Fresh Houthi attacks targeting Saudi Arabia and attacks by Iran on vessels in the Gulf heightened supply concerns, causing oil prices to rise by more than 2% on Monday.
The shutdown of a major oil pipeline in Saudi Arabia and the postponement of a meeting between Iran and other Gulf countries have disrupted diplomatic efforts in the Middle East.
Other Precious Metals
Spot silver fell 0.7% to $64.02 per ounce, while platinum followed a flat course at $1,796.90.
Palladium remained near the $1,298.80 level, showing little change.