Gold Prices Rebound on Weaker Rate Hike Bets

Gold prices rebounded on Thursday after investors reduced bets on an immediate tightening cycle following the Federal Reserve's decision to keep interest rates unchanged.

The Fed voted 9-3 to maintain the target range at 3.5% to 3.75%, with three policymakers favoring a quarter-point increase, weakening the immediate rate threat.

CME FedWatch pricing showed the probability of a September increase had fallen to about 63% from roughly 81% before the decision, supporting gold prices despite continued inflation concerns.

The World Gold Council sees bullion potentially reaching $4,500 if there are weaker growth, renewed geopolitical stress, or lower rate expectations, while TD Securities analysts believe the rebound is vulnerable and may drift towards $3,900 if energy shock keeps rate expectations elevated.