Gold Prices Drop as US Inflation Fuels Fed Rate Hike Expectations
Gold prices fell toward $4,300 on Monday amid rising expectations for a Federal Reserve rate hike following higher-than-expected U.S. inflation data. The dollar strengthened and oil prices rose in response to the economic developments. Gold had declined for three consecutive weeks, with gold futures down nearly 1% as investors shifted focus to interest-bearing assets due to potential policy tightening. The core consumer price index increased by 0.3% month-on-month in August, reinforcing market speculation that a rate hike could occur at this week's Fed meeting—now priced at an 88% probability. Despite these pressures, ANZ maintained its long-term gold target of $5,400 per ounce and cited geopolitical tensions as potential drivers for continued demand.
