Gold Prices Dip as Oil-Driven Inflation Concerns Weigh
Traders priced an 88% chance of a September increase as the core consumer price index rose 0.3% and oil gains added pressure.
- Underlying inflation accelerated in August, with core consumer prices rising 0.3% on the month. This latest print piles pressure on the Federal Reserve to conduct its first interest rate hike in three years at its policy meeting this week.
- Traders are pricing in an 86% probability of a U.S. rate hike at the central bank's September 15-16 policy meeting, up from about 67% prior to inflation data released last week, according to the CME FedWatch Tool.
- As investors recalibrate expectations for Federal Reserve policy, bullion traded near US$4,340 an ounce, struggling after falling for a third straight week. Higher borrowing costs typically pressure gold, which pays no interest.
- President Donald Trump reiterated calls for lower rates on Sunday, voicing growing frustration with the central bank. Oil prices jumped more than 2% following fresh Houthi strikes on Saudi Arabia and Iranian attacks in the Gulf.
- Goldman Sachs maintains an upside risk forecast for gold to reach $4,900 an ounce by the end of 2026. European Central Bank policymakers left the door open to further rate hikes if energy prices drive broader inflation.
12 Articles
12 Articles
The Economic Times
Times of IndiaGold prices dip as oil-driven inflation concerns weigh
Gold prices witnessed a slight decline, primarily driven by surging oil prices, raising inflation worries among traders. With an 86% probability of a US interest rate hike on the horizon, consumer prices saw a notable rise in August, further solidifying expectations of increased rates. As higher interest rates typically reduce gold's allure, other precious metals also faced downturns on Monday.
Around 7:30 AM on September 14th, Vietnam time, the spot gold price fell 0.2% to $4,339.96 per ounce, marking its third consecutive weekly decline. Gold prices were pressured by inflation and expectations of a Fed interest rate hike. Gold was heading for a consecutive weekly decline ahead of the US release of inflation data. Gold fell more than 1% due to rising US inflation and escalating oil prices.
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