Gold Surges Above $4,400 as US Data Reduces Fed Hike Odds
Gold prices have surpassed $4,400 as investors increasingly expect the US Federal Reserve to hold off on further interest rate hikes. The latest data from the non-farm payrolls in July shows a decline, coupled with modest consumer price inflation, has reduced expectations of a Fed rate increase next month.
The CME FedWatch Tool indicates that markets are now pricing a 35% chance of a Fed rate hike at the upcoming policy meeting, down from 47% a month earlier. This softer US data is dampening Fed hike odds and exerting selling pressure on the US Dollar (USD), making bullion cheaper for most buyers.
According to James Steel, chief precious metals analyst at HSBC, 'If oil doesn't steal the show again, if the situation in the Middle East does not erupt and oil prices spike, then it looks as if the path of least resistance for gold is higher.'