Gold Price Today, August 17: XAU/USD Rises 0.5% Towards $4,400 as Fed Hike Bets Fade

Key Takeaways

• Spot gold rose approximately 0.45% to around $4,396 per ounce during Monday’s Asian session.
• Weak US retail sales and softer inflation data reduced expectations for a September Federal Reserve rate increase.
• XAU/USD faces resistance around $4,416–$4,450, while the 100-day moving average near $4,386 provides immediate support.

Gold Price Rises Towards $4,400

The gold price today advanced towards the psychologically important $4,400 level as weaker US economic data reduced expectations that the Federal Reserve would raise interest rates in September.

Spot gold traded near $4,396 per ounce at the time of writing, up approximately 0.45% from its previous close of $4,376.59. Monday’s trading range stood between approximately $4,367 and $4,416, highlighting continued volatility around the $4,400 threshold.

Gold entered the new week on firmer ground after gaining around 0.8% last week. However, prices remain below Thursday’s two-month high of approximately $4,450, where profit-taking previously emerged.

Weak US Data Reduces Fed Rate-Hike Expectations

Gold’s latest advance was primarily supported by changing expectations for US monetary policy.

US retail sales declined 0.6% month-on-month in July, compared with expectations for a 0.1% increase. The disappointing report followed softer consumer and producer inflation readings, strengthening the view that the Federal Reserve may not need to raise rates at its September meeting.

Money markets currently indicate roughly a 33% probability of a September rate increase, meaning traders see approximately a 67% chance that rates will remain unchanged.

Lower interest-rate expectations tend to support gold because bullion does not provide interest income. When Treasury yields decline, the opportunity cost of holding gold becomes less significant.

The two-year US Treasury yield slipped to around 4.156% on Monday, while the ten-year yield eased to approximately 4.684%. The US Dollar Index also fell towards 99.4, making dollar-denominated gold less expensive for buyers using other currencies.

Middle East Tensions Create a Mixed Gold Backdrop

Persistent tensions involving Iran and the Strait of Hormuz are also affecting gold prices, although their influence is not entirely straightforward.

Negotiations between the United States and Iran remain stalled, while tanker traffic through the Strait of Hormuz has slowed substantially. Brent crude traded near $88.50 per barrel after gaining around 6% last week, while WTI remained close to $82.12.

Geopolitical uncertainty can increase demand for gold as a defensive asset. However, higher oil prices may also raise inflation expectations and encourage the Federal Reserve to maintain restrictive monetary policy. The result is a competing set of forces: safe-haven demand supports bullion, while energy-driven inflation risks could limit its upside.

What Could Move Gold Next?

Attention now turns to the minutes from the Federal Reserve’s July 28–29 meeting, scheduled for release on August 19. Traders will look for details about policymakers’ views on inflation, economic growth and the conditions required for another interest-rate increase.