Gold Nears 10-Week High as US Dollar Weakens and Rate Hike Bets Fall

Gold prices extended gains on August 18, hovering near a 10-week high as a weaker US dollar and declining expectations of a Federal Reserve rate hike boosted the appeal of non-yielding assets.

Spot gold was up 0.4 per cent, or USD 18, at USD 4,435 an ounce, its strongest levels in more than two months. Spot silver gained 0.8 per cent, or USD 0.6, to trade at USD 66.34 an ounce.

The US dollar index was trading around 99.56 after declining in the previous session, supporting gold prices as the metal becomes cheaper for holders of other currencies.

Expectations of a Federal Reserve rate hike fell to around 35 per cent following softer inflation data, reducing the opportunity cost of holding non-yielding assets like gold.