Gold Falls as Higher Oil Prices Lift Rate-Hike Bets
Gold fell to $4,170 an ounce on Monday, its lowest level since August 5, as surging oil prices fueled inflation concerns and strengthened expectations for higher-for-longer interest rates. A firm US dollar and US Treasury yields near 19-year highs also weighed on the non-yielding metal. Brent crude surged to $107 a barrel after President Donald Trump rejected an Iranian peace proposal aimed at resolving the conflict and reopening the Strait of Hormuz, prompting markets to increase bets on further Federal Reserve rate hikes. Markets now see a more than 70% chance of a second rate hike as soon as October, according to CME’s FedWatch Tool. Cleveland Fed President Beth Hammack said Friday that persistently high inflation risks conditioning the public to accept elevated prices as the norm, adding that the central bank cannot allow that to happen. Focus now turns to this week’s US data, including Wednesday’s PCE inflation report and Friday’s nonfarm payrolls figures.
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Gold fell to $4,170 an ounce on Monday, its lowest level since August 5, as surging oil prices fueled inflation concerns and strengthened expectations for higher-for-longer interest rates. A firm US dollar and US Treasury yields near 19-year highs also weighed on the non-yielding metal. Brent crude surged to $107 a barrel after President Donald Trump rejected an Iranian peace proposal aimed at resolving the conflict and reopening the Strait of Hormuz, prompting markets to increase bets on further Federal Reserve rate hikes. Markets now see a more than 70% chance of a second rate hike as soon as October, according to CME’s FedWatch Tool.
Cleveland Fed President Beth Hammack said Friday that persistently high inflation risks conditioning the public to accept elevated prices as the norm, adding that the central bank cannot allow that to happen. Focus now turns to this week’s US data, including Wednesday’s PCE inflation report and Friday’s nonfarm payrolls figures.