FX.co ★ Gold Remains Under Pressure

Gold hovered near $4,300 an ounce on Monday after logging three consecutive weekly declines, pressured by surging oil prices and mounting expectations of tighter Federal Reserve policy. Oil jumped to near four-month highs after Saudi Arabia shut a key pipeline used to bypass the Strait of Hormuz following drone attacks. The prolonged conflict in the Middle East has delivered an inflationary shock to the global economy, reinforcing expectations of a hawkish interest-rate stance. Futures markets now imply about an 86% probability that the Fed will raise its benchmark rate by 25 basis points on Wednesday. Data released Friday showed US consumer inflation holding at 3.4% in August, unchanged from July and in line with forecasts, while the monthly CPI rose 0.4%, the fastest pace in three months. US producer prices also quickened in August as the war involving Iran drove wholesale energy costs higher, and labor-market indicators continued to signal resilient employment conditions.