US Inflation Fueled Fed Rate-Hike Bets Spark Gold Price Slide

Gold prices dipped on Friday as hot US inflation data bolstered bets that the Federal Reserve will hike interest rates this week. The precious metal has been trading in a narrow range, hovering around $4,400 since rebounding from a floor near $4,000 in July.

The latest inflation print showed core consumer price index increasing 0.3% from a month earlier, adding pressure on the Fed to make its first rate hike in three years. Traders are pricing in an approximately 88% chance of a rate increase in September, which would typically be negative for gold as it doesn't pay interest.

However, by tightening monetary policy, the Fed could risk attracting President Donald Trump's ire, who has repeatedly called for lower rates. With conflict in the Middle East escalating and oil prices surging, inflationary pressure remains high.