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WAM reported that gold rose over 1 percent after hitting a six-week low, driven by a weaker US dollar and falling bond yields that eased pressure on the precious metal. The rebound took spot gold above the 4300-dollar level in trading that reflected renewed safe-haven interest. Investors monitored developments closely as the Federal Reserve prepared to announce its latest policy move later that day.
FX Empire data placed spot gold at 4342.42 dollars per ounce, marking a gain of 48.54 dollars or 1.13 percent at one point during the session. The 10-year Treasury yield slipped to 4.973 percent, falling below the 5-percent threshold that had weighed on bullion earlier in the week. Yields on the 30-year and 2-year Treasuries also eased, aligning movements across the curve in a direction supportive for gold.
A World Gold Council assessment found that central banks continued adding to their gold reserves, with China reporting its largest monthly increase in nearly three years by adding 20 tonnes in July. Such purchases have totalled more than 60 tonnes year-to-date for the Chinese central bank, lifting its holdings to 2366 tonnes. The sustained buying provided underlying support even as investor flows fluctuated with policy expectations.
Reuters figures showed traders pricing in a 92-percent probability of a Federal Reserve rate hike at the September meeting following resilient US economic data including retail sales and inflation readings. The central bank under Chair Kevin Warsh raised rates and signalled potential further tightening, a move that typically pressures non-yielding assets like gold by increasing the appeal of interest-bearing instruments. Despite the broader headwinds, the immediate market reaction featured short covering that lifted prices from recent lows.
Bloomberg data indicated gold had declined more than 3 percent for the month of September prior to the rebound, after trading above 4700 dollars per ounce in late August. The metal’s volatility underscored its sensitivity to shifts in US monetary policy outlooks and Treasury yield movements. Analysts tracked the 50-day moving average as a key technical level that gold had defended multiple times in recent sessions.
BullionVault reported that gold posted its strongest weekly gain since March 2020 in early August following unexpectedly weak US jobs data that lowered rate-hike expectations at the time. Nonfarm payrolls fell by 23,000 in July against forecasts for an 80,000 increase, with prior months revised lower. The performance highlighted gold’s role as a hedge during periods of economic uncertainty, even as subsequent data revived tightening bets.
