Gold Rebounds Ahead of Crucial Payrolls Report
Gold's price has been closely tied to shifting expectations of a Federal Reserve rate hike in September. The metal fell to its lowest level in about a month earlier this week, but has since recovered as Fed officials have tempered their hawkish tone.
The sharp mid-week selloff that pushed gold below $4,300 was largely driven by a stronger dollar and rising Treasury yields, which made the metal less attractive relative to interest-bearing assets. However, comments from Fed Governor Christopher Waller suggesting that the case for an imminent rate hike is not as strong as previously thought have pulled market-implied odds of a September hike back down.
Today's non-farm payrolls report will be a key test of this repricing. A weaker-than-expected print would likely reinforce bets on a Fed hold this month, which could support gold prices, while a stronger number would push hike odds back up and put renewed pressure on the metal.