Fed Minutes in Focus as Gold Nears $4,400 on Softening Inflation

Gold prices neared $4,400 as softer US inflation and weaker economic data reduced expectations of a September interest rate hike by the Federal Reserve.

The dollar index slipped 0.1%, making gold cheaper for buyers using other currencies, while gold itself pays no interest, which helps it when rates are lower.

Traders now assign only a 30% probability to a September rate increase, down from 47% a month earlier, and KCM Trade analyst Tim Waterer sees softer inflation and dollar weakness as giving gold room to challenge $4,400 again.

A convincing move beyond $4,500 would likely require another leg lower in the dollar or some easing in energy prices, but for now, attention is focused on the Fed's July 28-29 meeting minutes, due out Wednesday at 2 pm ET.