Gold retreats but poised to end best month since February

Gold slid 2% on Friday as the U.S. 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 U.S. rate hikes.

Spot gold XAU= was down 1.8% at $4,027.75 per ounce at 09:59 a.m. EDT (1359 GMT), after falling 2% earlier in the session. U.S. gold futures GCcv1 for August delivery dropped 1.9% to $4,025.10.

Gold has gained 0.5% so far this month, its biggest monthly increase since February.

The dollar gained 0.5% after dropping about 2.4% on Thursday, in its biggest one-day drop since January 2023. A stronger dollar makes bullion more expensive for holders of other currencies. USD/

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