Gold Prices Dip Amid US Dollar Recovery

Gold prices dropped by nearly 1% on July 31 due to profit-taking activities and the US dollar's recovery. The USD index rose around 0.3% after a sharp fall of 2.4% in the previous session, its largest one-day drop since January 2023.

The strengthening greenback makes gold more expensive for buyers holding other currencies, putting pressure on precious metal prices. Despite this, gold still managed to increase by about 1.7% in July, marking the first month of growth since February.

The 4,000 USD/ounce mark remains an important support threshold, attracting buying power whenever prices adjust. The US Federal Reserve's recent decision to keep interest rates unchanged has been met with a market assessment that there is around 65% chance of a rate hike in September. High interest rates can reduce the attractiveness of gold since it does not yield returns.