Waller's Dovish Tone Sends Gold Soaring Over 2%
Gold prices surged more than 2% on Thursday after Federal Reserve Governor Christopher Waller's dovish comments cast doubt on a potential interest rate hike. Waller stated that if inflation data shows the disinflation process continues, he would support keeping rates steady.
The comments by Waller, who has been vocal about stubbornly high inflation, offset firm services activity in the US economy. The ISM Services PMI rose to 55.4 from 54.1, exceeding estimates of 54.3.
Despite mixed US data, with jobless claims remaining at familiar levels and business activity improving, money markets priced in a lower chance that the Federal Reserve will raise interest rates by 25 basis points at the September 16 meeting. The odds stand at 54%, while for holding rates near 46%.
Traders are now eyeing speeches by Cleveland Fed Beth Hammack and Friday's Nonfarm Payrolls for August, which are expected to improve from a -23K contraction to 56K, with the Unemployment Rate foreseen at 4.1%, unchanged compared to the previous print.