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Gold dips to one-month low amid rate hike expectations
Gold prices declined to their lowest level in over a month, influenced by rising oil prices and recent U.S. inflation data from last week, which boosted expectations of an interest rate hike by the U.S. Federal Reserve this week. Spot gold fell by 1.8% to $2,271.59 per ounce, while futures contracts dropped by 2.2% to $2,311.20. This decline coincided with a roughly 4% increase in oil prices due to attacks on Saudi oil facilities and Iranian ships, as well as heightened tensions in the Middle East. Additionally, the dollar reached its highest level in two weeks, reducing the attractiveness of the yellow metal. Although gold is typically considered a hedge against inflation, expectations of a rate increase diminish its role as a safe haven. Markets are betting that the Federal Reserve may raise interest rates by as much as 89% at its upcoming meeting, with predictions of further increases before the end of March.
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