Gold prices climbed more than 1% on Thursday, recovering from a near one-month low hit in the previous session, as a softer US dollar and lower Treasury yields lent support. Spot gold rose 1.1% to $4,434.70 per ounce by 0425 GMT, with investors squarely focused on Friday’s US nonfarm payrolls report that could shape expectations for the Federal Reserve’s next policy decision.
Dollar and yields ease
The US dollar came under pressure on Thursday, while Treasury yields slipped from multi-year highs. A weaker dollar makes gold, which is priced in dollars, cheaper for buyers using other currencies, often boosting demand. The retreat in bond yields also reduces the opportunity cost of holding gold, which pays no interest.
Jobs data in focus
All eyes are on the US nonfarm payrolls report due on Friday. The data will be scrutinised for signs of labour market strength or weakness that could influence whether the Federal Reserve raises interest rates at its September 15–16 meeting. Markets currently assign a 62% probability of a rate hike this month, according to the CME FedWatch Tool.
Ahead of the official figures, the ADP National Employment Report showed that US private payrolls increased moderately in August, offering a mixed signal. The Fed’s Beige Book, published on Wednesday, described US economic activity as increasing modestly, with employment rising slightly and prices increasing moderately — a report that may do little to sway policymakers either way.
Ilya Spivak, head of global macro at Tastylive, said the payrolls report would “probably be the biggest defining moment of the week.” He added: “If the jobs report misses expectations, and September rate hike bets decline, that could see gold move higher. If prices get over the $4,400 level they’re currently in, we are going back in the direction of $4,500 and then $4,700.”
Geopolitical backdrop
On the geopolitical front, top aides to US President Donald Trump are reportedly pushing to prevent the Iran conflict from escalating before November’s midterm elections, according to four people familiar with the discussions. The sources said White House officials may consider ramping up military action after the November 3 vote. Such tensions can sometimes boost gold’s safe-haven appeal, though the immediate market focus remains on monetary policy.
Other precious metals
Among other metals, spot silver rose 1.2% to $66.08, platinum gained 1% to $1,777.79, and palladium firmed 0.8% to $1,356.50.
Key takeaways
- Spot gold rose 1.1% to $4,434.70 as the US dollar and Treasury yields eased.
- Friday’s US nonfarm payrolls report is the week’s main event for gold traders.
- Markets see a 62% chance of a Fed rate hike in September, according to the CME FedWatch Tool.
- A weaker payrolls number could reduce rate hike expectations and push gold higher, analysts say.
Common questions
Why did gold rise on Thursday?
Gold rose because the US dollar weakened and Treasury yields fell, making the metal more attractive to overseas buyers and lowering the opportunity cost of holding it. Investors are also positioning ahead of Friday’s key jobs report.
What is the nonfarm payrolls report?
The nonfarm payrolls report is a monthly US jobs release that counts the number of paid workers in the country, excluding farm workers and a few other categories. It is closely watched by the Federal Reserve for clues on labour market health and inflation pressure.
How does a Fed rate hike affect gold?
Higher interest rates increase the opportunity cost of holding gold, which yields no interest, and tend to strengthen the US dollar, both of which are negative for gold prices. Conversely, expectations of a pause or cut can support gold.
For the latest price movements, check the live gold price.