Gold Soars Toward $4,400 as Fed Hike Bets Crumble

Gold prices are on the rise, nearing $4,400 an ounce as bets on a Federal Reserve rate hike collapse. This week's trading has seen gold tick higher, with spot gold XAUUSD gaining around 0.4% to trade near $4,391 an ounce. December futures have also climbed toward $4,448.

The shift in interest-rate expectations is largely driving the increase in demand for bullion. With a 30% probability assigned to a September Federal Reserve rate hike, down from 47% recently, investors are looking at lower interest rates as a positive sign for gold. This reduced opportunity cost means that holding non-interest-bearing assets like gold becomes more attractive.

Oil prices have also had an impact on the market, with Brent crude approaching $89 after gaining over 5%. While geopolitical tension can boost gold's safe-haven appeal, expensive energy may revive inflation and force central banks to remain tighter. The bull case for gold therefore requires oil anxiety without a full inflationary relapse.