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Gold eyes gains above $4,400 as Fed hike bets fade
US retail sales fell 0.6% in July and Michigan sentiment slipped to 51 in August, weakening rate-hike expectations that tend to support gold.
Gold prices extended gains as traders looked for continued strength above $4,400, following a bounce from the $4,300 area. FXStreet said the metal has attracted follow-through buying despite staying below its highest level since June 5.
The move is linked to softer US data, including a 0.6% July drop in retail sales, the first decline in nine months. The University of Michigan Consumer Sentiment Index fell to 51 in August from 55.2 the prior month, alongside signals of cooling inflation that have reduced expectations for an immediate Federal Reserve hike.
FXStreet added that the weaker outlook for near-term tightening is weighing on the US dollar and supporting bullion, which does not pay interest. BNY strategists said softer US data over recent weeks has lowered rate hike expectations for the rest of 2026, while markets look for further inflation progress to reinforce a less hawkish path.
Still, geopolitical and energy factors could keep volatility elevated. FXStreet cited US preparations for economic measures related to Iran, comments involving the Strait of Hormuz, and fresh Ukrainian attacks on Russian refineries that are supporting oil prices, with CME Group’s FedWatch Tool showing traders pricing about a 65% chance of a rate hike in 2026.
Latest closeGold $4,432.00 ▲1.6%