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Gold Slides as Inflation Fears Fuel Fed Rate Hike Bets
(MENAFN) Gold prices fell Monday as mounting concerns over inflation stoked speculation that the Federal Reserve could raise interest rates this week.
The metal traded at $4,290 an ounce as of 1030 GMT, marking a 1.4% decline.
The pressure on gold came alongside a sharp run-up in energy markets this month. Brent crude climbed to roughly $108 a barrel, a monthly gain of about 19%, while European natural gas prices surged 35% month-on-month to reach around €84 ($97) per megawatt-hour on Monday.
The inflation backdrop has been building for weeks. Speaking last month at the Jackson Hole Economic Policy Symposium, Fed Chairman Kevin Warsh said inflation remained too high even as the economy showed resilience and investment in artificial intelligence continued to expand. He signaled that further monetary policy action could be necessary if inflation fails to move back toward the Fed's target.
Fresh data released Friday showed the annual US inflation rate at 3.4%, with the monthly rate rising to 0.4%. This month's climb in oil prices has only added to those inflationary pressures, intensifying the challenge facing the Fed's policy board as it weighs its next move.
The metal traded at $4,290 an ounce as of 1030 GMT, marking a 1.4% decline.
The pressure on gold came alongside a sharp run-up in energy markets this month. Brent crude climbed to roughly $108 a barrel, a monthly gain of about 19%, while European natural gas prices surged 35% month-on-month to reach around €84 ($97) per megawatt-hour on Monday.
The inflation backdrop has been building for weeks. Speaking last month at the Jackson Hole Economic Policy Symposium, Fed Chairman Kevin Warsh said inflation remained too high even as the economy showed resilience and investment in artificial intelligence continued to expand. He signaled that further monetary policy action could be necessary if inflation fails to move back toward the Fed's target.
Fresh data released Friday showed the annual US inflation rate at 3.4%, with the monthly rate rising to 0.4%. This month's climb in oil prices has only added to those inflationary pressures, intensifying the challenge facing the Fed's policy board as it weighs its next move.
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