Home / Market Update / Commodities / XAU/USD climbs above $2,450 as NFP eyed

XAU/USD climbs above $2,450 as NFP eyed

Gold prices surged past $2,450 on Thursday, fueled by the Federal Reserve’s (Fed) signal of potential rate cuts and escalating tensions in the Middle East. The Fed expressed increased confidence in a slowing inflation rate during the second quarter, bolstering expectations for a policy shift.

The XAU/USD index reached a two-week high of $2,462.30 as US bond yields plummeted, reflecting growing anticipation of a Fed pivot in September. Lower yields on interest-bearing assets make non-yielding assets like gold more attractive.

Fed Chair Jerome Powell hinted at a possible rate cut in September if inflation continues to moderate and the labor market remains stable. This dovish stance significantly increased expectations for a rate reduction.

The US dollar exhibited volatility due to weaker-than-expected economic data, including Unit Labor Costs and the ISM Manufacturing PMI. However, the focus remains on Friday’s Nonfarm Payrolls (NFP) report, which is expected to show a slowdown in job growth and wage increases.

Apart from the Fed’s stance, geopolitical tensions in the Middle East, particularly Iran’s vow to retaliate for the killing of a Hamas leader, have enhanced gold’s safe-haven appeal.

Overall, gold’s near-term outlook remains positive due to multiple tailwinds, including potential rate cuts, geopolitical risks, and a weaker US dollar.







Check Also

Dollar Climbs Amid Trade Talk Confusion and Fed Rate Cut Hopes

The US Dollar gained ground on Friday, with the US Dollar Index (DXY) rising 0.37% …