Gold Stalls Above $4,300 as Reduced Rate Hike Bets Weigh on Dollar

Gold prices held above $4,300 on Friday as reduced bets on a Federal Reserve rate hike weighed on the US dollar. Despite a mixed fundamental backdrop, gold recovered slightly from its losses heading into the European session.

The US Producer Price Index (PPI) was unchanged in July, falling short of expectations for a 0.2% rise. The yearly PPI decelerated to 4.7%, below the estimated 4.9%. This slowdown in inflation and the reduced probability of a September Fed hike to 40% from 72% overnight gave the US dollar bulls on the defensive and some support to gold.

Chicago Fed President Austan Goolsbee pointed out that recent price spikes are largely driven by temporary tariff and energy factors, favoring patience rather than aggressive monetary tightening. However, Cleveland Fed President Beth Hammack argued that progress on inflation is still insufficient, asserting further interest rate increases may be needed to secure price stability.

Gold's immediate support appears at $4,285, with deeper structural floors at the 50.0% retracement near $4,234 and the 61.8% level at $4,184. On the topside, initial resistance is seen at the 23.6% retracement at $4,347.