Dollar's Recovery Dents Gold Price Amid Fed Rate Hike Uncertainty

Gold prices dropped more than one percent on Friday as the US dollar regained its footing, but gold was still poised for its first monthly gain in five months. The spot price of gold fell 1.1% to $4,055.41 per ounce by 10:50 GMT. Despite this decline, gold is up about 1.7% so far this month.

According to independent analyst Ross Norman, 'Gold struggles to regain meaningful momentum and remains in the corrective phase of a broader structural bull market.' The dollar index has staged a modest recovery back above the key 100 level following its sharp post-FOMC sell-off, taking some of the shine off gold today.

The stronger dollar makes bullion more expensive for holders of other currencies. On Thursday, the Fed left interest rates unchanged at its policy meeting, while US central bank chief Kevin Warsh vowed to bring inflation down, leaving markets confused.