Weaker Dollar Boosts Gold as Crude Oil Faces Headwinds
Gold prices are expected to remain positive due to a weaker US dollar and fading expectations of a near-term interest rate hike, according to a report by Kotak Neo. Spot gold has extended its two-week rally, rising 0.5% intraday before paring gains to around $4,400 an ounce.
The key catalyst for this positive momentum was softer US retail sales and weaker consumer sentiment, which pressured the dollar and reduced expectations of a September Fed hike, said Kotak. The dollar declined 0.2%, while a steeper Treasury yield curve fueled expectations that the Fed is unlikely to adopt an aggressively hawkish stance in the near term.
Bullion prices have also been supported by geopolitical tensions, including renewed Strait of Hormuz attacks and possible US measures against Iran. Additionally, strong central-bank buying, particularly from China, has provided further support for gold.