Gold prices hovered near a more than seven-month low on Wednesday before rebounding to close at $4,029.89 an ounce
Gold prices climbed on Thursday, supported by weaker-than-expected U.S. employment data and declining oil prices, as investors looked ahead to the U.S. nonfarm payrolls report later in the day for further clues on the Federal Reserve’s interest rate path.
Spot gold gained 0.72 percent to $4,060.17 an ounce as of 5:02 GMT, after reaching its highest level since June 23 in the previous session. Meanwhile, U.S. gold futures for August delivery edged down 0.26 percent to $4,071.92.
In the UAE, gold rates eased AED0.5, with 24-carat gold declining to AED489.25 and 22-carat gold falling to AED453.
In addition, 21-carat gold edged lower to AED434.5, while 18-carat gold fell to AED372.25.
Meanwhile, 14-carat gold fell AED0.25 to AED290.5.
Investor attention turns to June nonfarm payrolls
Gold prices hovered near a more than seven-month low on Wednesday before rebounding to close at $4,029.89 an ounce, as weaker-than-expected private payrolls data provided support.
Private-sector employment increased by 98,000 jobs in June, following an unrevised gain of 122,000 in May, according to the ADP National Employment Report. Meanwhile, Federal Reserve Chair Kevin Warsh said on Wednesday that inflation expectations and inflation risks have eased in recent weeks, while reiterating the central bank’s commitment to returning inflation to its 2 percent target.
Markets are currently pricing in a roughly 64 percent probability of a September interest rate hike, according to the CME FedWatch Tool.
Investor attention is now firmly on the June nonfarm payrolls report, due later on Thursday, which is expected to provide fresh insight into the Federal Reserve’s next policy move.
Oil price decline eases concerns about inflation
Gold prices rose as oil declined after Iran and the United States wrapped up a round of indirect talks on Wednesday focused on the Strait of Hormuz, though the discussions made limited progress toward a durable agreement.
Higher oil prices, combined with a stronger labor market, can heighten concerns about inflation and keep interest rates elevated for longer.
While gold is typically viewed as a hedge against inflation, it tends to lose appeal when higher interest rates increase the opportunity cost of holding non-yielding assets.
Read: Oil prices fall over 1 percent to $70.82 as Iran and U.S. make progress in indirect talks
Other precious metals
As gold prices rose, the broader precious metals market traded positively. Spot silver climbed 1.6 percent to $60.06 per ounce, while platinum advanced 2 percent to $1,607.67. Palladium also rose, adding 1.4 percent to reach $1,227.13.