Gold, Silver Prices Surge on Waller Comments; Payrolls Data Next
Gold and silver prices surged on Thursday due to unexpectedly dovish comments from Federal Reserve Governor Christopher Waller. In U.S. trading, spot gold rose 1.92% to around $4,471.10 per ounce, while silver increased by 2.49% to approximately $66.830.
The gains were attributed to Waller's remarks on rates, which led to Treasury yields declining and the dollar weakening. This environment enabled the metals to build on the prior session's recovery. However, investor expectations have shifted towards a Federal Reserve holding steady after Waller signaled a preference for unchanged rates if next week's inflation figures continue to moderate.
The probability of a September rate hike slipped to around 50.4% from Wednesday's 63.2%. The two-year Treasury yield eased to 4.34%, and the 10-year note fell to 4.77%. Despite this, the ISM services index climbed to 55.4 in August, with the prices-paid component jumping to 72.6, its strongest level since October 2022, and employment staying below the expansion threshold at 47.8.
The next pivotal data points for rate expectations will be Friday's August nonfarm payrolls report and the September 11 CPI release. The metals' advance stemmed from a pause in the yield surge rather than a resolution of inflation concerns. Gold recovered from Wednesday's low of $4,281.70, peaked at $4,511.70, and then retreated toward the $4,489.87-to-$4,538.77 retracement zone.
For silver, prices climbed to $67.60 before pulling back, regaining the $66.00 threshold but failing to breach the more significant $67.21-to-$68.74 resistance band. The near-term trajectory now hinges on the payrolls data: a weaker reading would reinforce the case for a Fed pause, whereas stronger job and wage numbers would restore the dollar and short-end yields to the driver's seat.