Gold Prices Rebound to $4,490 Amid Weakening Dollar and Dovish Fed Remarks
Spot gold prices rose 2.32% on Thursday to touch $4,490 per ounce as investors regained confidence in the metal's rebound momentum. This move comes after a brief dip below $4,300 per ounce the previous day, which had pushed spot gold to a four-week low.
The strengthening of the yen and declining U.S. Treasury yields provided additional support for precious metals. However, despite these tailwinds, several short-term headwinds persist in the market. The opportunity cost of holding non-yielding assets such as gold remains high due to rising sovereign bond yields in major global economies.
Expectations of a Federal Reserve rate hike also pose an additional challenge for gold investors. However, dovish remarks by Fed Governor Christopher Waller have led traders to remain cautious about the possibility of a rate hike in September. According to the CME FedWatch tool, the probability of a rate hike has dropped from 63% to approximately 48%. The market is now awaiting Friday's Non-Farm Payrolls (NFP) report for new clues regarding the outlook for Federal Reserve monetary policy.