Gold Prices Retreat Towards $4,300 as Traders Weigh Fed Rate-Hike Path

Gold's recent rally has stalled, with prices retreating towards $4,300 as traders reassess their expectations for the Federal Reserve's next move on interest rates. The metal had briefly touched $4,500 in intraday trading and reached a two-month high of $4,449 before profit-taking kicked in.

The July US jobs report came in weaker than expected, which initially sent gold prices higher due to lower odds of additional rate hikes. However, the rally didn't stick, and a flat Producer Price Index for July gave traders reason to pare back their positions.

Despite this volatility, central bank demand continues to provide a structural floor for prices, with sovereign buyers accumulating gold reserves at an elevated pace. Employment data and inflation readings will be key indicators for the September rate decision, which could either push rate-hike odds lower or revive hike expectations.