Gold slips as oil rally fans rate hike bets ahead of Fed meeting
GLD•Oil gains and other metals
Although gold is typically seen as an inflation hedge, higher interest rates tend to reduce the appeal of non-yielding bullion.
Oil prices jumped more than 2% on Monday after fresh Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf compounded supply concerns following the closure of a key Saudi oil pipeline.O/R
Middle East diplomacy appeared to falter after a meeting between Iran and other Gulf states was postponed.
Among other metals, spot silver XAG= slipped 0.7% to $64.02 per ounce, platinum XPT= steadied at $1,796.90, and palladium XPD= was little changed at $1,298.80.
Gold eases as oil rally lifts rate-hike expectations
Gold prices eased on Monday as a surge in oil prices stoked inflation concerns, boosting expectations that the U.S. Federal Reserve may raise interest rates at its policy meeting this week.
Spot gold XAU= slipped 0.3% to $4,334.31 per ounce by 0330 GMT after posting a third consecutive weekly decline on Friday. U.S. gold futures GCcv1 dropped 0.8% to $4,375.00.
Fed and BOJ meetings in focus as inflation data supports hike bets
"Gold isn’t finding conditions to its liking. Rising energy prices plus climbing rate expectations ahead of the Fed and BoJ meetings are delivering a clear yield headwind for gold," said Tim Waterer, chief market analyst at KCM Trade.
"In the meantime, dips should still find buyers as an uncertainty hedge while geopolitics and rate policy remain fluid."
Reinforcing expectations that the Fed will raise interest rates, data last week showed U.S. consumer prices accelerated in August, while a key measure of underlying inflation posted its largest increase in four months.
