Gold prices fall 2%

Gold slid 2 percent on Friday as the US dollar rebounded from a more than one-month low hit in the previous session,

though the metal was still on track for its first monthly gain in five as weaker inflation data reduced expectations of further US rate hikes.

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Spot gold was down 1.3 percent at $4,049.83 per ounce at 1:40 p.m. EDT (1740 GMT), after falling 2 percent earlier in the session.

US gold futures for August delivery dropped 1.3 percent to $4,107.

Gold has gained 1.1 percent so far this month, its biggest monthly increase since February.

The gains have been primarily driven by softer inflation data, which led traders to scale back expectations for Federal Reserve interest rate hikes for the year and as oil prices retreated to pre-Iran war levels earlier this month.

“Although gold is on the cusp of ending a four-month losing streak, the precious metal has struggled to carve a bigger gap above the psychological $4,000 level,” said Han Tan, chief market analyst at Bybit.

The metal remains supported above $4,000 by expectations that Fed Chair Kevin Warsh may broaden the central bank’s focus beyond its preferred inflation measures and rate increases, Tan said.

Data on Thursday showed US inflation slowed in June, but the easing was likely temporary as renewed hostilities in the Middle East lifted oil prices.

Warsh this week pledged an unwavering commitment to bring inflation down without signaling a readiness to raise interest rates.

The dollar was steady after dropping about 2.4 percent on Thursday, in its biggest one-day drop since January 2023.

A stronger dollar makes bullion more expensive for holders of other currencies.

Traders see a 65 percent chance of a rate hike in September, versus a more than 80 percent chance a week before, according to the CME FedWatch Tool.

Elsewhere, China’s market regulator urged solar companies to resist “vicious” price competition in a price compliance guidance meeting on Friday, a statement showed.