Gold prices slipped modestly on September 8 as rising oil prices intensified inflation concerns and strengthened market expectations for a Federal Reserve rate hike in September, according to market reports. Investors are now awaiting US inflation data for further clues on the monetary policy trajectory.

Spot gold declined 0.4% to $4,385.09 per ounce, while US gold futures for December delivery dropped 1% to settle at $4,430.10 per ounce. Daniel Pavilonis, senior market strategist at Stone X, noted that gold remains range-bound as higher rate hike probabilities continue to cap upside momentum, persistently weighing on market dynamics.

Adding to the pressure, oil prices touched multi-week highs, with Brent crude approaching the $100 per barrel mark and reaching $99.46, its highest level since July 24, further stoking inflationary worries. Peter Grant, vice president and senior metals strategist at Zaner Metals, said the market is still digesting the latest US employment report while awaiting upcoming CPI and PPI data. Meanwhile, rising oil prices are fueling inflation concerns and underpinning expectations for a September rate increase.

According to the CME FedWatch tool, traders now price in approximately a 60% probability of a rate hike at the upcoming Federal Reserve policy meeting, up from around 50% prior to the latest data release.

Gold's commodity attributes gained notable traction in August, as physical consumption and investment demand rebounded in tandem. Gold jewelry prices surged 46 yuan per gram on a single day, while gold mining stocks advanced 43% during the month, reflecting that physical demand expands simultaneously during price upcycles. However, month-end price declines pulled jewelry prices lower.

Looking ahead to September, gold prices are expected to navigate a complex interplay of data validation, policy direction, and geopolitical dynamics. On the policy front, the September 17 FOMC rate decision stands as the month's pivotal event.