Gold Extends Gain as Dollar, Treasury Yields Retreat

Gold climbed above $4,400 an ounce on Thursday, extending the previous session's rebound as a pullback in the dollar and Treasury yields provided some relief. New York Fed Bank President John Williams said there is evidence that inflation continues to ease as the impact of tariffs fades, while higher energy prices have yet to spill over into other services. Data on Wednesday also showed that US private employment growth slowed in August. Still, markets are pricing in around a two-thirds chance of a Fed rate hike later this month following Chair Kevin Warsh’s hawkish remarks on Friday. Elsewhere, oil prices halted their rally after President Donald Trump said the latest attacks on Iran would be short-lived while indicating that the US stands ready for further strikes, easing inflation concerns and providing additional support to bullion.

Gold rose above $4,360 an ounce in afternoon trading Wednesday, recovering from a near one-month low touched earlier, as the USD and Treasury yields pulled back from recent highs, while investors await US payrolls data due Friday for further clues on the Federal Reserve’s policy path. Oil prices hit fresh six-week highs as traders weighed elevated supply risks from ongoing Middle East hostilities against signs that crude was still reaching the market. Meanwhile, the latest ADP report showed US private businesses added 38,000 jobs in August, the weakest increase since January and below expectations of 47,000, pointing to a broader cooling in the labor market. Markets now price in a 66% chance of a September Fed hike, up from around 40% a week ago, according to the CME FedWatch Tool. Elsewhere, the Dutch central bank said it had transferred 86 metric tons of gold from New York and Ottawa to London over the past six months to improve tradability and strengthen crisis preparedness.

Gold stabilized around $4,330 an ounce Wednesday after a recent selloff pushed bullion to its lowest level in more than three weeks, as investors reassessed the outlook for Federal Reserve interest rates following a pause in the oil rally and weaker-than-expected US labor data. US private businesses added 38,000 jobs in August, the weakest increase since January and below expectations of 47,000, pointing to a broader cooling in the labor market. Markets now price in a 66% chance of a September Fed hike, compared with around 40% a week ago, according to the CME FedWatch Tool. Gold remained under pressure as the dollar held near a two-week high, supported by safe-haven demand amid concerns over the economic impact of the energy shock and diverging monetary policy paths. The US said it had launched overnight airstrikes on targets in Iran, prompting retaliation from Tehran in the most serious escalation between the two countries in weeks.