Gold hits 11-week low as Fed rate outlook and oil rally weigh
Gold prices fell to an 11-week low on Monday, pressured by expectations of prolonged high Fed rates and rising oil prices that stoke inflation fears.
Gold prices extended their decline on Monday, sliding to an 11-week low as stronger-than-expected U.S. economic data reinforced the view that the Federal Reserve may keep interest rates elevated for longer. Spot gold fell 0.8% to $4,296.08 an ounce, its weakest since March 23, while U.S. gold futures for August delivery dropped 1% to $4,322.60 per ounce.
The sell-off accelerated after Friday's stronger-than-expected employment report prompted investors to reassess the monetary policy outlook. Rising oil prices added to inflation concerns, further dampening the appeal of non-yielding assets like gold. The precious metal has now lost over 3% since Friday, as markets price in a higher-for-longer rate environment.
For gold traders, the current environment is a classic headwind: higher real yields and a stronger U.S. dollar, driven by hawkish Fed expectations, typically pressure gold prices. Meanwhile, the rally in crude oil complicates the inflation picture, potentially delaying any rate cuts. Live gold prices and charts on NowPrice show the metal testing key support levels, with traders watching for a potential bounce or further downside.
Looking ahead, the market will focus on upcoming U.S. inflation data and the Fed's next policy meeting for clues on the rate path. A break below the $4,280 area could open the door to further losses, while a recovery above $4,350 would signal short-term stabilization. Traders should also monitor oil price dynamics and geopolitical developments that could shift risk sentiment.