Gold Edges Higher on Weaker Dollar, Rate Hike Bets

Gold prices rose on Thursday, supported by a decline in the US dollar and Treasury yields. The spot price of gold increased by 0.9% to $4,425.83 per ounce, while US gold futures rose 1.3% to $4,472.

The uptick in gold comes as investors await key payrolls data, which could influence expectations for a Federal Reserve rate hike this month. The CME FedWatch Tool indicates that traders are pricing in about a 60% chance of an interest rate hike at the Fed's policy meeting later this month.

Although higher interest rates typically diminish gold's appeal, Giovanni Staunovo from UBS notes that a 'modestly weaker dollar, and slightly lower US rates are helping gold.' The market remains sensitive to shifts in expectations for the September meeting, with no forward guidance from the Fed currently available.