- Spot gold falls 0.4% to $4,436.04 an ounce.
- Traders raise September Fed rate-hike bets to 60%.
- Gold remains up more than 10% for August.
- Silver gains 1%, while platinum and palladium fall.
Gold prices slipped on Monday as renewed tensions between the United States and Iran heightened inflation concerns and increased expectations of a Federal Reserve interest-rate hike, although bullion remained on track for its strongest monthly gain since January.
Spot gold fell 0.4% to $4,436.04 an ounce by 0835 GMT, after touching its lowest level since August 19. U.S. gold futures for December delivery declined 1% to $4,486.40.
Gold came under further pressure after Federal Reserve Chair Kevin Warsh delivered hawkish remarks at the Jackson Hole symposium on Friday, saying the central bank would have more work to do if policymakers were not confident that inflation was returning to its 2% target.
Traders have since increased their expectations of a September rate hike to around 60%, up from roughly 36% before Warsh’s comments, according to the CME FedWatch Tool.
Higher interest rates generally weigh on gold because the metal does not pay interest, reducing its appeal relative to yield-bearing assets.
Despite Monday’s decline, gold remained more than 10% higher for August and was heading for its biggest monthly gain since January. Bullion climbed to $4,696.18 an ounce last week, its highest level in more than three months, before retreating.
Renewed U.S.-Iran tensions have also added to inflation concerns after oil prices rose sharply following the latest escalation around the Strait of Hormuz. Rising energy prices can increase inflationary pressures and strengthen expectations for tighter monetary policy.
Investors are now awaiting key U.S. economic data due later this week, including the ADP employment report and nonfarm payrolls, which could provide further signals on the Federal Reserve’s interest-rate outlook.
Elsewhere, spot silver rose 1% to $66.99 an ounce and was up more than 16% for the month. Platinum fell 1.1% to $1,799.89 an ounce, while palladium declined 1.3% to $1,403.92.