Gold Prices Rebound as Weak US Dollar Overshadow Hawkish Fed Expectations
The price of Gold (XAU/USD) has rebounded on Thursday, rising to $4,425 after a sharp rally in the Japanese Yen weighed on the US Dollar. The US Dollar Index (DXY), which tracks the value of the Greenback against six major currencies, traded around 99.26 at press time, near its one-week low.
The move higher for Gold may be limited due to elevated Bond yields and hawkish Federal Reserve expectations, with traders pricing in a 60% chance that the US central bank will raise interest rates at its September 15-16 meeting. The benchmark 10-year US Treasury yield trades around 4.78%, near its highest level since October 2023.
A weaker US Dollar is generally positive for Gold, but buyers may be cautious ahead of Friday's United States Nonfarm Payrolls (NFP) report, which could significantly influence expectations for the Fed's next policy move.