Gold Soars to Fresh High as Dollar Weakens and Rate Hike Bets Fade

Gold prices surged to a fresh high since June on Monday, driven by a weakening US dollar and fading expectations of further Federal Reserve interest rate hikes.

The latest leg higher in gold comes as the US dollar index slipped to a multi-month low, making dollar-denominated gold cheaper for holders of other currencies.

Concurrently, investors have pared back bets on additional Fed tightening after recent economic data pointed to cooling inflation and a softening labor market. According to the CME FedWatch tool, market-implied probabilities of a rate hike at the Fed's September meeting have dropped to around 20%, down from nearly 40% a month ago.

This shift in expectations has reduced the opportunity cost of holding non-yielding bullion, a key factor supporting gold demand. Analysts attribute the move to a combination of technical momentum and macro fundamentals.