Gold rebounds above $4,450 as Waller tempers Fed rate hike bets ahead US jobs data
Gold price (XAU/USD) gains momentum to around $4,470 during the early Asian session on Friday. The precious metal extended its recovery as Federal Reserve (Fed) rate hike bets ease. All eyes will be on the US August Nonfarm Payrolls (NFP) report, which is due later on Friday.
Gold prices surged above $4,450 on Friday as traders adjusted their expectations for a potential U.S. Federal Reserve rate hike in September. The precious metal climbed to around $4,470 during the early Asian session, following hawkish remarks from Fed Chair Kevin Warsh. However, Fed Governor Christopher Waller's recent comments tempering inflation expectations put a damper on rate hike hopes, leading to a decrease in Fed funds futures probability of a September hike from 63.2% to 50.2%.
Saxo Bank's Head of Commodity Strategy Ole Hansen noted that gold's sensitivity to shifts in market expectations for the September meeting remains high. August's U.S. Nonfarm Payrolls report, expected to show a 56,000 job addition, could influence the Fed's future decisions. Should the employment data exceed expectations, the U.S. Dollar may strengthen, putting downward pressure on gold prices.
Meanwhile, analysts from HSBC suggest that a near-term U.S. rate increase is unlikely, provided high energy prices do not translate into higher core inflation.
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Also reported by 2 other outlets
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- Trading Day: Waller cools Fed hike hoopla investing.com
