Gold Falls as Fed Hike Bets Strengthen

Gold fell below $4,300 an ounce on Monday, touching its lowest level in more than a month and extending losses after posting a third consecutive weekly decline, as a stronger US dollar and growing expectations of a Federal Reserve rate hike weighed on the precious metal. Markets are pricing in around a 90% probability of a rate hike on Wednesday, following data showing US consumer inflation accelerated in August. A key measure of underlying inflation rose at its fastest pace in four months and came in slightly above expectations. Meanwhile, oil prices extended their rally after Saudi Arabia shut a major crude pipeline following drone attacks, disrupting a key route that bypasses the Strait of Hormuz and adding to global supply concerns. Elsewhere, the Bank of Japan is also expected to raise rates on Friday, as elevated energy prices and persistent Middle East tensions continue to complicate the inflation outlook.

Gold decreased to 4282.00 USD/t.oz, the lowest since August 2026. Over the past 4 weeks, Gold lost 2.94%, and in the last 12 months, it increased 16.49%.

Gold struggled near $4,300 an ounce on Monday after declining for three straight weeks, weighed down by surging oil prices and bets on tighter Federal Reserve monetary policy. Oil prices jumped toward four-month highs on Monday after Saudi Arabia closed a key pipeline that was used to bypass the Strait of Hormuz following drone attacks. The protracted Middle East crisis has delivered an inflationary jolt to the global economy, reinforcing a hawkish outlook on interest rates. Markets are currently pricing in around an 86% chance that the Fed will raise its policy rate by 25 basis points on Wednesday. Data on Friday showed US consumer inflation steadied at 3.4% in August, the same as in July and in line with forecasts, while monthly CPI rose 0.4%, the strongest increase in three months. US producer prices also accelerated in August as the Iran war pushed wholesale energy costs higher, while labor market data pointed to continued resilience in employment.