Gold Prices Retreat After Hitting Two-Month High Amid Interest Rate Expectations

World gold prices declined on August 13 after reaching a two-month high. The decline came as investors took profits following a sharp increase in prices, while waiting for US producer price data to assess the monetary policy outlook of the Fed.

The spot gold price fell by 0.68% to $4,376.55 per ounce, while December gold futures decreased by 0.77% to $4,433.12 per ounce.

This correction phase is attributed to investors' caution and waiting for US PPI data to find more signals before deciding the next trend of gold prices.

The recent increase in gold prices has been significant, with a gain of over 8% since the beginning of August, as recent US economic data shows signs of cooling down. The US consumer price index (CPI) increased by 3.4% in the 12 months up to July, lower than June's 3.5%, and in line with economists' forecasts.

This development has lowered expectations for the Fed to raise interest rates in the September meeting, reducing the probability to around 40% from about 54% a week earlier.