Gold Holds Advance on Waller Remarks

Gold traded near $4,500 an ounce on Friday after rising for two consecutive sessions, as dovish comments from Federal Reserve Governor Christopher Waller led markets to scale back expectations for a September rate hike. Waller said he would favor keeping rates unchanged if price pressures continue to ease. Traders now see roughly a 50% probability of a September rate hike, down from about 63% a day earlier. Investors are also awaiting Friday’s payrolls report and next week’s inflation data for additional clues on the Fed’s policy outlook. The US dollar and Treasury yields fell sharply following Waller’s remarks, supporting bullion. Meanwhile, oil prices were on track for a strong weekly gain amid ongoing hostilities in the Middle East and heightened uncertainty over shipping through the Strait of Hormuz, keeping inflationary risks in focus.

Gold climbed to around $4,470 an ounce on Thursday, rebounding from more than three-week lows as the US dollar and Treasury yields retreated from recent highs following dovish comments from Federal Reserve officials. Markets scaled back expectations for a Federal Reserve rate hike after Fed Governor Christopher Waller said he sees continued progress on inflation and would support keeping interest rates unchanged at the September meeting if that improvement is confirmed in the August data. Waller's comments followed remarks Wednesday from New York Fed President John Williams, who said there is evidence that inflation continues to ease as the impact of tariffs fades. A weaker-than-expected ADP employment report, meanwhile, pointed to a slowdown in the US labor market. Traders now see roughly a 50% probability of a September rate hike, down from about 62% before Waller's comments. Investors now await Friday's payrolls report and next week's inflation data for further clues on Fed policy.

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.