Gold Struggles to Regain Momentum Amid Rising Interest Rate Expectations

The trading week has come to an end, and gold's price action has been characterized by a lack of momentum. Over the past four sessions, the metal has only registered a modest -0.36% move, indicating its recent indecision.

This neutral behavior is partly due to the competition from alternative markets such as bonds, which have regained attractiveness in recent sessions. As long as uncertainty surrounding aggressive central banks remains present, gold demand may struggle to establish a stronger recovery, allowing a neutral environment to persist in XAU/USD price action.

The latest U.S. CPI figures for August came in at 3.4% year-over-year, matching expectations. However, the data failed to show a significant slowdown in inflation, which remains above the Federal Reserve's 2.0% target. This has led to an increase in market expectations of a more restrictive Fed, with the probability of raising benchmark rates climbing to nearly 86% from around 70% the day before.