Gold Prices Dip as Rate Hike Expectations Fade

Gold prices took a breather on Friday as the recent rally lost steam. The precious metal declined by 0.1% to $4,344.24 per ounce at 0851 GMT, extending losses after falling 1.3% in the previous session and erasing most of this week's gains.

Saxo Bank analyst Ole Hansen attributed the decline to profit-taking following a strong run of gains, with tame US inflation data and reduced expectations for further rate hikes largely priced in for now.

The FedWatch Tool showed that traders are now pricing only a 33% chance of a rate hike in September, down from about 44% last week. Lower interest rates boost gold as it does not yield interest, making it an attractive asset when interest rates are low.