Gold Edges Ahead Despite Friday's Slump as Rate Hike Odds Tumble
Gold prices took a hit on Friday, but the metal is still poised to post its first monthly gain since February. Despite slipping 1.4% to $4,045.10 an ounce and U.S. gold futures falling 1.4% to $4,043.20 an ounce, bullion remains up around 1% for July.
The latest Federal Reserve policy meeting left borrowing costs unchanged, but the Fed's mixed messaging on interest rates has prompted investors to scale back expectations for a September rate hike. CME FedWatch data now shows a 63% chance of a rate hike in September, down from more than 80% just a week ago.
Analysts at ING say investors remain concerned that the Federal Reserve may not fully back its inflation fighting stance with additional policy tightening, which has limited gold's gains. A stronger dollar has also weighed on gold, making it more expensive for buyers using other currencies and reducing international demand.