Weaker Dollar Boosts Gold Amid Fading Rate Hike Bets

Gold prices have risen due to a weaker US dollar and fading expectations of a Federal Reserve rate hike. The gold market appears to be pricing in a stagflationary environment, with softer employment and expectations that the Fed will tolerate current inflation levels.

The US dollar fell to its lowest level in more than two months, making gold cheaper for buyers holding other currencies. Markets have pared bets on a Federal Reserve rate hike after last week's weaker-than-expected US payrolls report and subdued consumer inflation data.

Investors are now awaiting minutes from the Fed's July meeting, due on Wednesday, for clues on the central bank's policy outlook. Gold prices rose 0.9% to $4,413.93 per ounce, with U.S gold futures for December delivery edging 0.8% higher.