Dollar's Rebound Weighs on Gold as Rate Hike Bets Scale Back
Gold prices slid over 1% on Friday as the US dollar regained its footing after a brief sell-off following the Federal Reserve's policy meeting earlier in the week. The dollar index rose by 0.3%, breaking above the key 100 level, making gold more expensive for holders of other currencies.
The stronger dollar weighed on gold demand, with spot prices slipping to $4,055.41 per ounce and US gold futures for August delivery falling to $4,053.60. Despite this decline, gold is still poised to post its first monthly rise since February as investors scale back their bets on rate hikes.
Analyst Ross Norman noted that gold remains in the corrective phase of a broader structural bull market, struggling to regain meaningful momentum. The easing of inflation concerns after the Fed left interest rates unchanged and vowed to bring down prices has led traders to price in a 67% chance of a rate hike in September.