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Gold rises above $4,400 as Fed hike odds ease

CME FedWatch shows markets see about a 70% chance the Fed will keep rates unchanged in September, up from 48% a week earlier.

Reported · Written up by our desk · Major Pairs

Gold prices extended their intraday advance on Monday, trading around $4,425, up 1.1% on the day, as expectations for a Federal Reserve rate hike at its September meeting faded and the US dollar stayed weak, FXStreet said. The pullback in US rate-hike expectations followed a run of softer economic data, including lower July Nonfarm Payrolls, a monthly decline in Retail Sales, and year-over-year slowing in CPI and PPI.

According to the CME FedWatch tool, traders now price roughly a 70% probability that the Fed will keep rates unchanged next month, compared with 48% a week ago. FXStreet also noted the US Dollar Index, DXY, was around 99.50 after hitting 99.30, its lowest level since June 5.

The report said gold's near-term outlook remains constructive, with spot holding just above the 100-day simple moving average near $4,385. It also pointed to Middle East tensions around the Strait of Hormuz as keeping oil elevated, which supports energy-driven inflation risks that have not been fully ruled out by markets.

Looking ahead, traders are set to monitor the Minutes of the July FOMC meeting on Wednesday for more clarity on the Fed’s policy path, FXStreet added. It identified nearby support around the 100-day SMA at $4,385, with additional levels at $4,200 and the 50-day SMA near $4,147, while citing the 200-day SMA around $4,506 as the next resistance area.

Latest closeGold $4,432.00 ▲1.6%|Dollar index 99.64 ▼0.3%

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