Gold drops more than 1% on US rate-hike bets

Business Recorder reported that gold prices slipped more than 1% on Monday, as higher oil prices stoked inflation worries and strengthened bets on further Federal Reserve interest rate increases. Spot gold was quoted 1.5% lower at $4,223.95 per ounce by 0117 GMT, while US gold futures dropped to $4,257.90. KCM Trade chief market analyst Tim Waterer described high bond yields and expensive oil as a thorn in gold's side.

Oil rose on conflicting reports about supply, keeping inflation in the spotlight. Iran maintained that only diplomacy could end its conflict with the US and Israel, after President Donald Trump rejected Iran's plan to reopen the Strait of Hormuz and stop the fighting. Oil then rebounded by more than 1%, while the Fed lifted its target range by a quarter point earlier this month to 3.75% to 4%, and CME's FedWatch tool implies a 66% chance of another US hike in October.

This week brings a set of US jobs and inflation figures: job openings, the ADP employment report, PCE prices and nonfarm payrolls. Waterer warned that inflation or jobs data running hotter than forecast could push bond yields higher and weigh on bullion. Silver also dropped 2.6% to $62.64 an ounce, while platinum slid 2.1% to $1,741.45 and palladium shed 2.1%, to $1,239.95.