Gold hits 7-week low as oil-driven inflation fears boost rate-hike bets
GLD•Gold fell 3% to $4,156.45 an ounce, its lowest since August 5, as higher oil prices fueled inflation fears and rate-hike bets. Traders saw a 70.3% chance of a Fed rate hike in October.
1. Gold drops sharply
Spot gold fell 3% to $4,156.45 an ounce as of 0814 GMT on Monday, touching its lowest level since August 5. U.S. gold futures for December delivery declined 3.1% to $4,188.80.
2. Oil and rates weigh
Higher oil prices and increased expectations for further U.S. rate hikes were cited as the main drivers of gold’s weakness. The dollar held firm and Treasury yields extended gains, while traders priced in a 70.3% chance of an October Fed rate hike. Brent crude rebounded after President Donald Trump rejected an Iranian peace deal to resolve the conflict and reopen the Strait of Hormuz.
3. Economic data ahead
Investors were watching U.S. job openings, the ADP employment report, PCE readings and nonfarm payrolls due this week. Spot silver fell 4.8% to $61.17 an ounce, platinum declined 2.4% to $1,735.88 and palladium lost 2.2% to $1,239.60.
