Gold Falls to Three-Month Low as Inflation and Rate Expectations Weigh

Global gold prices fell last week to their lowest level in three months, with Gold Bullion attributing the decline to growing expectations of higher inflation and a longer period of elevated interest rates.

The outlook for borrowing costs weighed on the precious metal. Higher interest rates tend to make gold less attractive because it pays no interest, unlike some competing investments.

Although gold is often viewed as a hedge against inflation, expectations of rising prices can also put it under pressure if they strengthen the case for keeping interest rates high.

Gold Bullion’s explanation highlighted that tension, linking last week’s fall to concerns about inflation and the prospect that borrowing costs will remain elevated for longer.