Gold Prices Slip Back Towards $4,300 as Rate Hike Outlook Weighs on Bullion

Gold prices retreated on Friday, falling to $4,329.50 an ounce as traders weighed the likelihood of a Federal Reserve rate hike. The precious metal dropped 0.5% in London trading after reaching a 10-week high earlier in the week due to tame US inflation data.

The decline comes despite renewed investor appetite and increased central bank purchases, particularly from China, which have driven gold's recent recovery above the key $4,000-an-ounce threshold.

Analysts say that while the prospect of no rate hike is generally positive for non-yielding gold, rates remaining elevated for an extended period could weigh on bullion by making bonds more attractive.