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Gold falls below $4,400 as the dollar holds gains amid Fed bets

Gold slid further after US CPI cooled in July, while traders kept pricing near an 80% chance of a 2026 rate increase, pressuring non-yielding bullion.

Reported · Written up by our desk · Major Pairs

Gold prices extended an intraday pullback after reaching the $4,450 area earlier in the session, dropping further below $4,400 into the European period, according to FXStreet.

The outlet pointed to fading relief from signs of moderating US inflation, but investors remained focused on the possibility that higher energy prices could re-ignite inflation concerns. US CPI was reported as easing to 3.4% year over year in July from 3.5%, while the core measure excluding food and energy rose 0.2% month over month and 2.5% year over year, matching expectations.

FXStreet also tied the move to expectations that the Federal Reserve may still tighten, saying the CME Group FedWatch tool showed traders pricing in nearly an 80% chance of a rate hike in 2026. That expectation has supported the US dollar and reduced demand for gold as a non-yielding asset.

Geopolitical risk tied to the US-Iran standoff and attacks involving the Houthis has increased war-risk premiums for oil, adding to inflation worries and supporting the case for Fed tightening. FXStreet said traders are looking ahead to Thursday's US Producer Price Index and weekly initial jobless claims, along with FOMC speeches, to assess the next drivers for USD demand and gold.

Latest closeGold $4,467.10 ▲1.9%

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