Gold prices dropped to a one-month low on Monday, May 18.
A weekend drone strike on a UAE nuclear facility pushed crude oil to a two-week high. This escalation intensified global inflation concerns.
Rising energy costs increased expectations for prolonged high interest rates from the Federal Reserve. Higher rates reduce the appeal of non-yielding assets like gold. Markets now see a growing probability of a Fed rate hike by year-end.
Spot gold fell 1.1% to approximately $4,489 per ounce. U.S. gold futures for June delivery declined 1.5% to about $4,493 per ounce. Investors shifted toward rising bond yields and a stronger U.S. dollar.