Gold lingers near seven-month low as US rate-hike prospects weigh

Gold prices steadied on Thursday but lingered near a more than seven-month low touched in the previous session, as expectations of U.S. interest rate hikes weighed on the precious metal. Spot gold held its ground at $3,999.33 per ounce, as of 0843 GMT. U.S. gold futures for August delivery edged 0.2% lower to $4,014.90/oz. Markets currently see a 66% chance that the U.S. Federal Reserve will hike rates in September, CME FedWatch data showed. "The Fed's hawkish shift, which has led to a repricing of rate hike expectations, remains the dominant driver of gold's weakness," said Nikos Tzabouras, senior market analyst at Jefferies-owned Tradu.com. ETF outflows and the rotation into equities driven by the AI boom are definitely factors weighing on the precious metal, said Tzabouras, noting that these forces tend to be cyclical and do not subtract from the broader structural case for gold. Bullion has declined more than 6% since Fed's meeting last week and dipped below the $4,000 level on Wednesday for the first time since November 2025. Prices were down over 28% from its record high of $5,594.82 reached on January 29. Investors now await the U.S. Personal Consumption Expenditures data, the Fed's preferred inflation gauge, due at 1230 GMT, for further cues on monetary policy. On the geopolitical front, Lebanon and Israel are reviewing a U.S.-backed plan for Israeli forces to hand over parts of Hezbollah-era seized territory to the Lebanese army. Among other metals, spot silver rose 0.4% to $57.64 per ounce and platinum lost 0.4% to $1,571.95. Palladium inched 1.6% higher to $1,184.70.