Gold Prices Remain Steady Amid Weaker Dollar, Higher Interest Rate Expectations

Gold prices remained largely unchanged at $4,454.47 per ounce on Monday, August 31, as a weaker US dollar supported demand for the precious metal.

The US Dollar Index was trading 0.1% lower at 99.64, making gold cheaper for holders of other currencies and lending support to prices.

However, expectations of higher interest rates in the US following comments from Federal Reserve Chairman Kevin Warsh capped gains. Warsh said that 'as of now, I believe the labor markets are consistent with full employment. But on the price-stability side of our mandate, the numbers are more concerning.'

As a result, expectations of a Federal Reserve rate hike at the September FOMC meeting rose to over 55%, according to the CME's FedWatch Tool.