Gold prices slipped on Monday, as expectations of a US Federal Reserve interest rate hike this week strengthened after recent hot inflation data and rallying oil prices.
Spot gold was down 0.9 per cent at $4,308.24 per ounce by 0907 GMT, after posting a third straight weekly decline on Friday. US gold futures dropped 1.4 per cent to $4,348.50.
The dollar firmed at an over one-week high, making greenback-priced bullion more expensive for holders of other currencies.
"Markets are now fully pricing in a Fed rate hike following last week's CPI data. At the same time, the renewed rise in oil prices could reinforce inflation concerns and keep the Fed on a hawkish footing," said UBS analyst Giovanni Staunovo.
US consumer prices accelerated in August, while a key measure of underlying inflation posted its largest increase in four months, data showed on Friday, reinforcing U.S. rate hike expectations.
Traders are pricing in about an 89 per cent chance of a rate hike at the central bank's policy meeting this week, up from about 67 per cent prior to the inflation data last week, according to the CME FedWatch Tool.
Major banks such as Goldman Sachs and HSBC now expect the Fed to raise interest rates by 25-basis-points at its policy meeting on Tuesday and Wednesday.
The BOJ is also expected to raise rates on Friday, amid rising energy prices and little sign of easing Middle East tensions.
Although gold is typically seen as an inflation hedge, higher interest rates tend to reduce the appeal of non-yielding bullion.
Oil prices rose about 3 per cent on Monday, after new strikes on Saudi Arabian energy and civilian infrastructure and Iranian attacks on ships in the Gulf compounded supply concerns following the closure of a key Saudi oil pipeline.
Middle East diplomacy appeared to falter heading into Monday with the postponement of a meeting between Iran and other Gulf powers.
Among other metals, spot silver slid 1.9% to $63.22 per ounce, platinum dipped 1.4% to $1,770.82, and palladium also fell 1.4% to $1,280.97.
Published on September 14, 2026
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