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Sept 14 (Reuters) - Gold prices edged lower on Monday as a rally in oil prices fuelled inflation concerns and reinforced expectations that the U.S. Federal Reserve could raise interest rates at its policy meeting this week. FUNDAMENTALS * Spot gold was down 0.5% at $4,327.80 an ounce by 0119 GMT after posting a third consecutive weekly decline on Friday. U.S. gold futures for December delivery fell nearly 1% to $4,368.60. * Traders are pricing in about an 86% chance of a U.S. rate hike at the central bank's policy meeting on September 15-16, up from about 67% prior to inflation data last week, according to the CME FedWatch Tool. * U.S. consumer prices accelerated in August, while a key measure of underlying inflation posted its largest increase in four months, data on Friday showed, reinforcing expectations that the Fed will raise interest rates this week. * Although gold is typically seen as an inflation hedge, higher interest rates tend to diminish non-yielding bullion's appeal to investors. * Oil prices jumped more than 2% on Monday after fresh Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf compounded supply concerns following the closure of a key Saudi oil pipeline. * Middle East diplomacy appeared to falter after a meeting between Iran and other Gulf states was postponed. * Goldman Sachs saidon Friday it still sees upside risk to its forecast for gold to reach $4,900 an ounce by the end of 2026, although it expects price volatility to remain elevated. * Elsewhere, two European Central Bank policymakers left the door open to further rate hikes if conflict-driven increases in energy prices feed through to broader inflation in the euro zone. * Among other metals, spot silver slipped 1.1% to $63.75 per ounce on Monday, platinum dropped 0.8% to $1,782.50, and palladium slid 0.7% to $1,290.36. (Reporting by Sukanya Mitra in Bengaluru; Editing by Sherry Jacob-Phillips) Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
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