Gold retreats but poised to end best month since February

The dollar was steady 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/

Elsewhere, China's market regulator urged solar companies to resist "vicious" price competition in a price compliance guidance meeting on Friday, a statement showed. Silver is a key industrial metal used in solar photovoltaic panels.

Spot silver XAG= fell 2.1% to $57.76 per ounce. Platinum XPT= slid 0.6% to $1,650.14, and palladium XPD= dropped 1.8% to $1,281.18, although both metals were headed for monthly gains.

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 for further U.S. rate hikes.

Spot gold XAU= was down 1.3% at $4,049.83 per ounce at 1:40 p.m. EDT (1740 GMT), after falling 2% earlier in the session. U.S. gold futures GCcv1 for August delivery dropped 1.3% to $4,107.

Gold has gained 1.1% 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. O/R

"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.