Gold slides to $4,196 as oil revives inflation concerns

September 28, 2026 (MLN): Gold prices dropped on Monday, as higher crude prices revived inflation fears and strengthened bets on further interest rate increases by the US Federal Reserve.

Currently, spot gold is down 2.06% to $4,196.18  an ounce as of [10:00 am] PST, according to data reported by Mettis Global.

Crude prices bounced back by more than 2% after President Donald Trump said he had turned down an Iranian proposal to reopen the Strait of Hormuz and halt the fighting.

Tehran, for its part, maintained that diplomacy is the only route to resolving its confrontation with the US and Israel.

The Fed raised its benchmark rate earlier this month by 25 basis points, taking the target range to 3.75%-4%.

According to CME's FedWatch Tool, markets are currently assigning a 66% probability to another hike in October.

Costlier energy tends to push inflation higher by lifting expenses across the economy.

While gold is commonly seen as a shield against rising prices, elevated interest rates make holding the non-yielding metal less attractive.

Investors are now turning to a series of US labour market and inflation releases due this week, including job openings, the ADP employment report, the Personal Consumption Expenditures (PCE) price index, and nonfarm payrolls, according to CNBC.

Among other precious metals, silver fell 2.6% to $62.64 per ounce, platinum slipped 2.1% to $1,741.45, and palladium lost 2.1% to $1,239.95.

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