Dollar Weakness Boosts Gold Price as Fed Rate Hike Bets Fizzle

Gold prices edged higher on August 17 as the US dollar weakened to its lowest level in over two months, making gold cheaper for buyers holding other currencies. The dollar's decline to a psychologically important 100 level was a major factor in gold's price increase.

The spot gold price rose 0.28% to $4,387.95 per ounce by 09:25 a.m. EDT (1325 GMT), while US gold futures for December delivery increased 0.2% to $4,444.40.

Bart Melek, global head of commodity strategy at TD Securities, noted that the gold market appears to be pricing in a stagflationary environment with softer employment and expectations that the Fed will tolerate current inflation levels.