Gold Slips As Fed Rate Hike Odds Hit 88%, Hot US Inflation And Crude Rally Pressure Bullion

New Delhi: Global gold prices slipped on Monday as stronger-than-expected US inflation increased expectations that the Federal Reserve could raise interest rates at its policy meeting later this week.

Spot gold traded near USD 4,340 an ounce, down nearly 0.2 percent during the session. The precious metal has lost about 1.8% over the past week amid growing concerns over interest rates.

Silver also came under pressure, falling nearly 0.8% to around $64 an ounce. Platinum and palladium traded lower as well.

MCX Trading Restricted

Gold and silver contracts on the Multi Commodity Exchange (MCX) will trade only during the evening session on Monday because of Ganesh Chaturthi.

The commodity exchange will remain closed during the morning session, with trading scheduled to resume at 5 pm and continue until 11:30 pm.

MCX gold futures expiring in October stood at ₹1,52,655, while silver futures for September delivery were at ₹2,34,886 per kg.

Inflation Raises Rate Hike Bets

Underlying US inflation strengthened in August, adding to concerns that price pressures remain elevated. Core consumer prices, excluding volatile food and energy costs, increased 0.3% from the previous month.

The data, released on Friday, strengthened expectations of tighter monetary policy. Traders are pricing in nearly an 88% probability of a Federal Reserve rate hike in September, which would be its first increase in three years.

Higher interest rates generally weigh on non-yielding assets such as gold and silver.

Oil Rally Adds Pressure

Fresh geopolitical tensions have also pushed crude oil prices sharply higher, raising fears of another inflationary impulse.

WTI crude climbed above USD 107 a barrel as concerns intensified over disruptions to important shipping and energy routes.

Houthi forces have seized key ports in Yemen, while Saudi Arabia temporarily shut its East-West pipeline following drone attacks.

A merchant vessel was also struck in the Strait of Hormuz on Sunday, adding to concerns over global energy supplies and keeping inflation risks elevated.