Spot global gold prices closed on 14/9 down nearly 50 USD, settling at 4,298 USD per ounce. This morning, prices held near that level, marking their lowest point since early August.

The market downturn stemmed from accelerating global oil prices and higher-than-expected US inflation, reinforcing the likelihood of the Federal Reserve (Fed) raising interest rates at its meeting this week.

Crude oil prices surged early this week, prompting global central banks to consider tightening monetary policy to curb inflation. "This development is unfavorable for gold", noted Jim Wyckoff, a market analyst at American Gold Exchange.

Most economists surveyed by Reuters anticipate the Fed will raise rates at its 15-16/9 meeting, with some expecting at least one additional hike before 3/2027. This comes as the US consumer price index (CPI) for August increased by 0,4% from July, data released last week showed.

Investors are currently pricing in a 93% probability of a Fed rate hike. The Bank of Japan (BOJ) is also expected to raise rates on 17/9, amid rising oil prices and persistent conflict in the Middle East.

Global crude oil prices climbed 4% early this week, with Brent trading at 107 USD per barrel and WTI at 102 USD. Attacks on Saudi Arabian energy infrastructure and oil tankers in the Gulf are further escalating the risk of supply disruptions.

A planned meeting between Iran and Arab nations in the Gulf, intended to discuss the situation in the Strait of Hormuz, was also postponed. It had been scheduled for 14/9 in Oman.

The Dollar Index's rise to a two-week high also contributed to gold's depreciation, making the metal more expensive for buyers using other currencies. Beyond gold, silver, platinum, and palladium prices also saw a 1-2% decline early this week.

Ha Thu (according to Reuters)