Gold Prices Rebound as Dollar Eases Ahead of Key Jobs Report
Gold prices rebounded on Thursday after hitting their lowest level since August 7. Spot gold rose by 1% to $4,373.01 as the US dollar and Treasury yields eased.
The move was expected, given that gold doesn't pay interest. When Treasury yields rise, investors can earn more in cash or government bonds, making holding bullion less attractive. A firmer dollar also makes dollar-priced gold more expensive for buyers using other currencies.
A small pullback in yields from near multi-year highs and a 0.1% dip in the dollar were enough to steady prices. However, traders still see a 64% chance of a rate hike at this month's meeting, according to CME FedWatch.
The big swing factor is Friday's nonfarm payrolls report, which will shift expectations for where rates go next and affect the yield-and-dollar backdrop gold trades against.