Gold prices fall in global market

Gold prices fell as concerns about inflation rose amid a sharp jump in oil prices, raising expectations that the US Federal Reserve could raise interest rates at its meeting this week.

Spot gold prices fell 0.3 percent to $4,334.31 an ounce at 9:30 a.m. Bangladesh time on Monday (September 14). Earlier, the price of gold fell for the third consecutive week on Friday. Meanwhile, US gold futures fell 0.8 percent to $4,375 an ounce.

"Current market conditions are not favorable for gold," said Tim Waterer, chief market analyst at KCM Trade. Rising energy prices and rising expectations of interest rate hikes ahead of the Fed and Bank of Japan meetings are putting yield pressure on gold.

However, he believes that buyers may show interest again if the price of gold falls due to uncertainty over the geopolitical situation and monetary policy.

Data released last week also strengthened the possibility of a U.S. interest rate hike. The country's consumer price inflation rose in August. At the same time, the core inflation index also increased by the largest amount in four months.

According to the CME FedWatch tool, the probability of a rate hike at the Fed's policy meeting on Tuesday and Wednesday is now about 86.5 percent, up from about 67 percent before the inflation data was released.

The Bank of Japan is also widely expected to raise interest rates on Friday. Sustained inflation and steady economic growth, coupled with rising energy prices and no sign of easing tensions in the Middle East, have raised the prospect of further rate hikes by the world's major central banks.

Gold is generally considered a safe haven asset as a hedge against inflation. However, as interest rates rise, the attractiveness of investing in gold, which does not pay any interest or profit, decreases.

Meanwhile, oil prices rose more than 2 percent on Monday as renewed Houthi attacks on Saudi Arabia and Iranian attacks on ships in the Gulf added to concerns about supply, while the closure of a key Saudi oil pipeline raised fears of a supply crunch.

Diplomatic efforts over the Strait of Hormuz have also suffered a setback, with the postponement of a scheduled meeting between Iran and Gulf states adding to the uncertainty in the Middle East.

Among other precious metals, spot silver prices fell 0.7 percent to $64.02 an ounce. Platinum prices were almost unchanged at $1,796.90 and palladium prices were little changed at $1,298.80.