Gold Poised to Break Nine-Week Winning Run

Gold strengthened above $4,000 an ounce on Thursday after falling to an eight-month low earlier this week, as Federal Reserve Chair Kevin Warsh said inflation expectations had eased over the past month, suggesting there was no urgency to raise interest rates. However, he reiterated the central bank’s commitment to restoring price stability. Data released on Wednesday also showed private-sector hiring in the US slowed more than expected last month, while investors now await the nonfarm payrolls report later today for fresh insights into labor market conditions and the Fed’s policy outlook. Markets continue to price in more than a 60% chance of a Fed rate hike in September. Gold also drew support from rising oil shipments through the Strait of Hormuz and signs of progress in indirect US-Iran talks, which pushed oil prices lower and eased inflation concerns.

Gold prices surged 2% to $4,090 per ounce on Wednesday, rebounding from near eight-month lows, as investors parsed comments from new Federal Reserve Chair Kevin Warsh and fresh US-Iran tensions raised doubts about Middle East stability. Speaking at the ECB’s annual forum in Sintra, Portugal, Warsh acknowledged that inflation risks and expectations have eased in recent weeks but reaffirmed the Fed’s commitment to returning inflation to its 2% target. He emphasized the central bank’s focus on price stability, a stance he first outlined in his debut press conference last month. Warsh also reiterated his decision to abandon traditional "forward guidance" on interest-rate policy, marking a shift in the Fed’s communication approach. Despite this, investors continued to bet on US rate hikes this year to curb inflation amid a robust labor market. Meanwhile, markets monitored updates from US-Iran peace talks in Qatar, though direct negotiations between the two sides remained unlikely.

Gold slipped below $4,000 an ounce on Wednesday, trading near its lowest level in almost eight months as strong US economic data underscored the economy’s resilience and reinforced expectations that the Federal Reserve will raise interest rates this year. The latest JOLTS report showed job openings climbed to a two-year high, while analysts expect another solid increase in June non-farm payrolls. Meanwhile, recent core inflation readings remained well above the Fed’s 2% target. Markets are now pricing in at least one Fed rate hike this year, with the first potentially coming as early as September. Investors also awaited updates from the ongoing US-Iran peace talks in Qatar amid hopes for a lasting ceasefire agreement, although the two sides were not expected to hold direct talks.