Gold drops more than 1% on U.S. rate-hike bets - CNBC

AI desk brief

Gold fell 1.5% to $4,223.95/oz and U.S. futures dropped 1.5% to $4,257.90 as higher oil prices reinforced inflation concerns and boosted expectations for additional Fed hikes. Traders are pricing a 66% chance of a U.S. rate hike in October after the Fed’s earlier quarter-point move to 3.75%-4.0%, while this week’s U.S. labor and PCE data could keep bond yields elevated and pressure bullion further.

The article also flags geopolitical risk around Iran and the Strait of Hormuz as a driver of firmer oil prices, but the immediate market read-through for gold is negative because higher energy costs may lift inflation and keep real rates/opportunity costs high. Silver fell 2.6% to $62.64/oz, platinum lost 2.1% to $1,741.45, and palladium declined 2.1% to $1,239.95.