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Gold slips as oil rebounds and Fed tightening bets return

Spot gold was down 0.7% to $4,254.77 per ounce, with CME FedWatch pricing a 66% chance of an October rate hike.

Reported · Written up by our desk · Precious Metals

Gold prices fell on Monday as oil rebounded more than 1%, reviving inflation concerns and strengthening expectations of additional Federal Reserve rate hikes, according to Reuters.

Spot gold was down 0.7% at $4,254.77 per ounce as of 0010 GMT, while US gold futures also edged lower by 0.7% to $4,289.70.

Traders are weighing the broader impact of higher energy prices on inflation, and the article notes that gold can face headwinds in a high interest rate environment because rising yields increase the opportunity cost of holding a non-yielding metal.

Earlier this month, the Fed raised its target range by a quarter percentage point to between 3.75% and 4%, and CME's FedWatch Tool showed traders pricing in a 66% chance of a US rate hike in October. The report also cites Cleveland Fed President Beth Hammack saying she is concerned that persistently high inflation risks could linger.

Latest closeGold $4,320.50 ▲0.5%

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