Gold Rises Above $4,100 as Rate Hike Odds Fall

Gold prices edged higher above $4,100 as traders trimmed their bets on a US Federal Reserve rate hike in September. The CME FedWatch tool showed that markets now price in nearly a 63.4% probability of a US rate hike in September, down from about 77% before the July Fed meeting.

Ongoing tensions in the Middle East could cap the upside for gold as it could push crude oil prices up and prompt central banks to hold rates at elevated levels for longer. The Islamic Revolutionary Guard Corps (IRGC) targeted US bases in Kuwait, Jordan, and Bahrain after US forces bombed a building on Iran's Qeshm Island.

The Strait of Hormuz will remain closed, according to the Iranian military, which added that 'the aggressor will be punished.'