Gold prices recover from two-month low as dollar rally stalls

Gold prices rebounded on Thursday, climbing from a two-month low after the dollar weakened from an 18-month peak, according to wire material. Spot gold rose 0.7% to $4,141.09 per ounce by 0140 GMT, following a dip to its lowest level since August 5 on Wednesday. The pullback in the dollar makes greenback-denominated gold less expensive for non-US holders.

"The short-term investment case for gold remains challenged," said Chris Weston, head of research at Pepperstone. "We would need to see a break above $4,275 to become more constructive on the near-term upside." Fed policymakers were divided when deciding whether to raise interest rates, with some seeing it as necessary to counter economic risks, while a more hawkish majority viewed it as essential to curb inflation.

Traders currently see only an 18% chance of a rate hike this month, but anticipate an 80% probability of an increase in December, based on CME's FedWatch tool. Higher interest rates diminish the appeal of non-yielding gold. The IMF's Managing Director, Kristalina Georgieva, cautioned about persistently high energy prices, record public debt, and risks from AI investments, urging governments to adopt protective fiscal and monetary policies.

Silver steadied at $60.18, platinum increased 2.1% to $1,665.00, and palladium grew 1.6% to $1,142.86.