Gold Prices Stabilize as Rate Hike Chances Fall to 31%

Gold prices steadied on Friday after pulling back from their highest point in over two months. The metal had rallied to its highest since June 5, driven by softer US inflation data and fading expectations for a Federal Reserve rate hike in September.

U.S. producer prices were unchanged in July, following a revised 0.1% drop in June. Meanwhile, U.S. consumer prices barely increased last month as the cost of gasoline declined for a second consecutive month.

Traders are now pricing only a 31% chance of a rate hike in September, down from about 44% a week earlier. Spot gold was little changed at $4,351.45 US an ounce after the contract fell 1.3% in the previous session.