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Gold prices dip as oil-driven inflation boosts rate hike expectations
Gold prices went down a little on Monday.
Oil prices went up by more than 2%.
Higher oil prices can make people worry that inflation will get worse.
Recent U.S. inflation data also increased expectations that the Federal Reserve will raise interest rates.
Higher interest rates can make gold less attractive because gold does not pay interest.
Investors put an 86% chance on a rate increase at the Federal Reserve’s September 15-16 meeting.
Gold has now fallen for three weeks in a row.
Other metals, including silver, platinum, and palladium, also became cheaper.
Spot gold fell 0.5% to $4,327.80 an ounce by 0119 GMT on Monday, extending a third consecutive weekly decline.
U.S. gold futures for December delivery dropped nearly 1% to $4,368.60.
Markets priced in an 86% chance of a U.S. Federal Reserve rate hike on September 15-16, up from 67% before last week’s inflation data.
Oil prices rose more than 2% after regional attacks and the closure of a key Saudi oil pipeline increased supply concerns.
Goldman Sachs maintained upside risk to its $4,900-an-ounce gold forecast for the end of 2026 while warning that volatility could remain elevated.
- Who
- Gold traders, the U.S. Federal Reserve, oil-market participants, and Goldman Sachs.
- What
- Gold prices declined as higher oil prices and U.S. inflation strengthened expectations of a Federal Reserve interest-rate hike.
- Where
- Global financial markets, with developments involving the United States, Saudi Arabia, Iran, and the Gulf region.
- When
- Monday, September 14; the Federal Reserve meeting is scheduled for September 15-16.
- Why
- Oil-supply concerns and recent inflation data increased expectations for higher interest rates, which can reduce demand for non-yielding gold.
Key facts
- Spot gold
- Down 0.5% to $4,327.80 an ounce by 0119 GMT
- U.S. gold futures
- December futures fell nearly 1% to $4,368.60
- Rate-hike probability
- Traders priced in an 86% chance of a Federal Reserve hike, up from about 67%
- Oil prices
- Rose more than 2% on Monday
- Gold forecast
- Goldman Sachs sees upside risk to a $4,900-an-ounce forecast for end-2026
- Other metals
- Silver fell 1.1%, platinum fell 0.8%, and palladium fell 0.7%
Sources
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