Gold Surges Near $4,400 Amid Weakening Fed Hike Expectations

Gold prices surged to near $4,395 during early Asian trading hours on Monday as expectations for a US Federal Reserve interest rate hike dropped following softer-than-expected US Retail Sales data.

The decline in retail sales, which fell by 0.6% month-over-month in July, added to evidence that inflationary pressure is easing. This has weighed on the US Dollar and boosted the price of gold, a USD-denominated commodity.

Money markets have priced in nearly a 33.1% chance of a September Fed hike, but analysts at Commerzbank argue that this backdrop remains supportive for bullion. They note that renewed buying interest from ETF investors is reinforcing the constructive medium-term outlook for gold.