New york: As increasing inflationary concerns raised the possibility of a rate hike by the Fed this week, gold prices dropped.

According to Anadolu Agency, the price of gold per ounce was at $4,290 as of 1030GMT, marking a decrease of 1.4%. This decline comes amid a backdrop of rising energy commodity prices and renewed focus on inflationary pressures.

Energy commodities have experienced significant increases this month, with Brent oil climbing to approximately $108, reflecting a 19% rise on a monthly basis. Similarly, European gas prices soared by 35% month-on-month on Monday, reaching around £84 ($97) per megawatt-hour. These developments have contributed to a heightened sense of urgency regarding inflation.

Last month, Fed Chairman Kevin Warsh addressed these concerns, emphasizing that inflation remained too high despite a resilient economy and growing investments in artificial intelligence. Speaking at the Jackson Hole Economic Policy Symposium, Warsh indicated that additional monetary policy steps might be necessary if inflation does not fall to the target level.

On Friday, the US inflation rate was reported at 3.4%, with the monthly rate increasing to 0.4%. The recent surge in oil prices has exacerbated inflationary concerns, putting additional pressure on the Fed's monetary policy board to consider potential rate hikes.