Gold Prices Poised for Monthly Gain as West Asia Tensions Rise

Gold prices are poised for their first monthly gain in five months, driven by West Asia tensions and a softer US interest rate outlook. The precious metal drew support after the US Federal Reserve left interest rates unchanged at its latest policy meeting.

Fed Chair Kevin Warsh refrained from offering clear guidance on the timing of the central bank's next move, prompting traders to dial back expectations of a September rate hike.

Markets are now pricing in a 63% probability of a rate hike in September, down from around 80% before the Fed's policy decision, according to CME Group's FedWatch Tool. Lower expectations of higher interest rates tend to support gold because the precious metal does not offer any yield.

Geopolitical uncertainty also continued to underpin bullion prices, as a drone strike on gas vessels at Egypt's Mediterranean port of Damietta has raised concerns that the US-Iran conflict could expand further, potentially disrupting shipping through the Suez Canal.