Gold Nears $4,400 as Fed Hike Bets Plummet

Gold prices rose on Monday, nearing $4,400 an ounce as bets on a September Federal Reserve rate hike collapsed. The precious metal gained about 0.4% to trade near $4,391 per ounce, while December futures climbed toward $4,448.

The softer US dollar and weaker US economic data improved demand for bullion, which benefits when cash looks less rewarding. Traders now assign only around a 30% probability to a September Federal Reserve rate increase, down from 47% recently.

Lower interest-rate expectations generally support gold by reducing the opportunity cost, the yield investors sacrifice by holding a non-interest-bearing asset. However, oil prices complicate the golden setup as Brent crude approached $89 after gaining more than 5% last week.