Gold Holds Decline on Rate Hike Bets

Gold traded around $4,300 an ounce on Tuesday, hovering near five-week lows as elevated oil prices strengthened expectations for a US Federal Reserve interest rate hike this week. Oil prices extended their gains as Saudi Arabia’s East-West pipeline remained shut, while Ukraine disputed President Trump’s claim that it had already reached an agreement with Russia to halt attacks on energy infrastructure. Rising energy prices fueled inflation concerns and increased pressure on the Fed to tighten policy, with markets currently pricing in roughly a 92% chance of a 25-basis-point rate hike on Wednesday. The US 10-year Treasury yield also climbed toward 5% amid inflation and fiscal concerns, adding further pressure on non-yielding bullion. Elsewhere, the Bank of Japan is also expected to raise rates on Friday, as elevated energy costs and ongoing tensions in the Middle East continue to complicate the inflation outlook.

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%.