Gold falls 2% on rate-hike bets as oil lifts inflation fears

Gold prices fell more than 2% on Monday, dropping to their lowest level since early August, as rising oil prices fueled inflation concerns and strengthened expectations of further Federal Reserve interest-rate hikes. Spot gold declined 2.7% to $4,171.85 per ounce, while US gold futures fell 2.7% to $4,204.30. Higher oil prices, driven by tensions over the Strait of Hormuz, are keeping inflation at the forefront for investors, according to KCM Trade analyst Tim Waterer. The Fed recently raised rates to a target range of 3.75% to 4%, and traders see a 69% chance of another hike in October. High interest rates increase the opportunity cost of holding non-yielding gold, despite its traditional role as an inflation hedge. Investors are watching upcoming US labor market and inflation data, including job openings and the PCE price index, which could influence further rate decisions. Other precious metals also fell, with silver down 4.3% and platinum down 2.8%.