Gold Surges on Weaker Dollar and Lower Rate Hike Expectations
Gold prices surged 4.73% on a weekly basis as the US dollar weakened and weaker-than-expected US labor data reduced expectations of further Federal Reserve tightening.
The yellow metal climbed to a seven-week high following the jobs report, which showed the economy unexpectedly added 23,000 jobs in July, compared to forecasts for an increase of about 80,000. This softer labour picture trimmed market expectations for a September Fed rate hike to about 44% from roughly 58%. Treasury yields fell in response, with the benchmark 10-year yield easing to around 4.60% from an intraday high of 4.68%, creating a supportive backdrop for precious metals.
Gold prices have been under pressure as geopolitical risk premiums eased following the postponement of a planned US strike on Iran, but staged a sharp reversal after the employment report. Immediate resistance is placed at $4,470, $4,500 for COMEX gold, while support lies at $4,330, $4,300, according to commodity experts.