Gold holds near $4,400 as fading Fed rate hike bets weigh on US Dollar
Gold (XAU/USD) struggles to build on its intraday advance on Monday but holds modest gains as the US Dollar (USD) remains under selling pressure amid fading expectations that the Federal Reserve (Fed) will raise interest rates at its September meeting.
Gold (XAU/USD) remained near $4,400 as fading expectations of a Federal Reserve rate hike impacted the US Dollar (USD). The precious metal struggled to capitalize on its intraday gains, trading around $4,401 during Asian trading hours. Markets now anticipate a 70% chance that the Fed will keep rates unchanged at their September meeting, up from 48% a week prior.
This shift follows a series of disappointing US economic data, including a decline in July's Nonfarm Payrolls (NFP), a drop in Retail Sales, and cooling inflation in the Consumer Price Index (CPI) and Producer Price Index (PPI). The US Dollar index (DXY) weakened, settling at 99.45, its lowest level since June 5. Analysts at DBS Group Research warn that the traditional relationship between US rates and the currency is weakening due to fading Fed-hike expectations, persistent fiscal concerns, and elevated long-term Treasury yields.
The US Dollar Index (DXY), tracking the Greenback against a basket of six major currencies, hovered around 99.45, its lowest since mid-June.
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Also reported by 1 other outlet
- Dollar slips to lowest since early June as rate hike bets fade businesstimes.com.sg
