Gold Surges Above $4,400 as Rate Hike Expectations Fizzle

The price of gold has strengthened to above $4,400 on Monday as expectations that the Federal Reserve (Fed) will raise interest rates at its September meeting have faded. The US Dollar (USD) remains on the back foot.

According to the CME FedWatch tool, markets now see around a 70% chance that the US central bank will keep rates unchanged next month, up from 48% a week ago. This change in expectations follows a run of disappointing US economic releases, including nonfarm payroll figures and inflation data.

The US Dollar Index (DXY) trades around 99.50 after touching 99.30, its lowest level since June 5. Gold retains a positive near-term bias, although buyers appear reluctant to push prices sharply higher.