Gold Prices Slip Amid Dollar Rebound, Still Poised for Monthly Gain

Gold prices slid 2% on Friday as the U.S. dollar rebounded from its lowest level in over a month. However, despite this decline, gold is still poised to end its best month since February with a gain of 0.5%. The metal's increase has been driven by softer inflation data, which led traders to scale back expectations for Federal Reserve interest rate hikes.

The U.S. inflation slowdown in June was likely temporary as renewed hostilities in the Middle East lifted oil prices. However, Fed Chair Kevin Warsh pledged an unwavering commitment to bring down inflation without signaling a readiness to raise interest rates. This has kept gold supported above $4,000.

Meanwhile, the dollar's gain made bullion more expensive for holders of other currencies. Traders now see a 65% chance of a rate hike in September, compared to over 80% just last week.