Gold Rebounds as Fed Rate-Hike Odds Fall to 55%

Gold prices rebounded to their highest level since June 18 after a 19% decline in February. The precious metal rose by 0.2% to $4,254.98 an ounce following its biggest one-day gain since February.

The rebound is attributed to a decrease in the probability of a September rate hike by the Federal Reserve, with odds falling to 55% from 67%. This reduction in the opportunity cost of holding gold has led to renewed buying and supported the precious metal's recovery.

IG's Tony Sycamore notes that a sustained break above gold's 200-day moving average could support a move toward $5,000. However, stronger-than-expected July payrolls could strengthen the dollar and delay this breakout.