Gold rallies to fresh highs on softer US dollar

Gold price rallied on Tuesday touching a fresh high for the week so far around $1,730 and traders are eying September’s high of $1,735. The precious metal rallied from a low of $1,695.24 on the day as the US yields made fresh lows of 3.564% in 10-year Treasury yield while the US dollar slid down on disappointing US economic data. At the time of writing, gold is trading at $1726.25 per ounce versus the previous closing price of $1699.29.

The Dollar Index DXY fell from a high of 111.886 for the day, or 110.870 on the following JOLTS data. US job openings fell to almost 10.1 million in August, according to the Bureau of Labor Statistics, below the consensus for 11.15 million and down from 11.17 million reported in July.

The larger-than-expected decline could be the first sign that demand for labour is falling ahead of this week’s main event in the US Nonfarm Payrolls data.

The weaker data has caused traders to bet the Federal Reserve may raise interest rates less than previously expected as the central bank turns more dovish as the US economy slows.

US stocks advanced on signs that the supply-demand gap in the labour market was narrowing, a dovish factor that is supportive of risk appetite on Wall Street. Risk appetite is back in vogue. Volatility is helping to elevate the price of gold, buoyed by expectations that central banks may ease the pace at which they tighten monetary policy resulting in US equity markets recording their strongest rebound since November 2020.