Gold (XAU/USD) edged higher during Tuesday's Asian session, snapping a two-day losing streak as the US dollar pulled back from a three-week high. The greenback's decline gained momentum alongside a rallying Japanese yen, offering support to the precious metal. However, the advance remained modest as hawkish Federal Reserve expectations and persistent geopolitical uncertainties limited upside.
Spot gold was last quoted around $4,440 per troy ounce, holding above the 200-day exponential moving average (EMA) near $4,288. Traders are reluctant to place aggressive bets ahead of key US inflation data due later this week.
US dollar weakness and Fed expectations
The US dollar index retreated from its highest level in three weeks, partly driven by strength in the yen. But the dollar's downside is cushioned by rising expectations that the Federal Reserve will raise interest rates again this month. The stronger-than-expected August nonfarm payrolls report reinforced the resilience of the US economy and kept the risk of further tightening alive.
Strategists at OCBC described the payrolls data as