Gold prices came under pressure in the international market on Monday. The possibility of the Federal Reserve raising interest rates this week has strengthened as inflation in the US has exceeded expectations. In addition, rising tensions in the Red Sea region have fueled crude oil prices, which has further negatively affected gold.

According to data released on Friday, core inflation (excluding food and fuel prices) in the US increased by 0.3 percent for the month of August. This has filled the market with fears that the Federal Reserve will increase interest rates. Traders are estimating an 88 percent chance of an interest rate hike this month. 

This will be the first time the Fed has raised interest rates in almost three years. Usually, when interest rates rise, investors are not interested in non-yielding assets like gold. With these expectations, the spot gold price is trading at around $ 4,340 per ounce, down 0.2 percent. Silver prices also fell 0.8 percent to $64 an ounce.

On the other hand, the tense situation in the Middle East led to a rise in crude oil prices. The capture of key ports in Yemen by Houthi rebels and the temporary closure of its pipeline due to drone attacks by Saudi Arabia have increased concerns about oil supply. 

On Sunday, a commercial vessel was attacked in the Strait of Hormuz. In the wake of these developments, the price of a barrel of crude oil crossed $107. Fears that higher oil prices will further increase inflation are also putting pressure on gold prices.

MCX trading was not held in the morning session on the occasion of Ganesha Chavithi in the Indian market. Trading will continue only from 5 pm to 11:30 pm.