Gold Rallies on Weaker Dollar, Geopolitics, as Brent Crude Faces Demand Weakness

Gold prices remain on an upward trajectory due to a weaker US dollar and fading expectations of a near-term interest rate hike. Spot gold has extended its two-week rally, rising 0.5% intraday before paring gains to around $4,400 an ounce.

The decline in the dollar was triggered by softer US retail sales and weaker consumer sentiment, which reduced the likelihood of a September Federal Reserve hike. This led to a steeper Treasury yield curve, further reducing expectations of aggressive monetary policy tightening in the near term.

Geopolitical tensions surrounding Iran's Strait of Hormuz have also contributed to gold's price increase. The ongoing uncertainty has boosted demand for safe-haven assets like bullion, with China's central bank being a significant buyer.

Brent crude oil prices remain cautiously bullish despite the escalating geopolitical risks. However, strong Gulf exports and weak demand could cap gains and eventually pull Brent towards $80 per barrel.