Gold Prices Edge Closer to $4,450 as US Dollar Weakens

Gold prices have been recovering from four-week lows below $4,300, with buying pressure looking to reclaim the key near-term resistance at around $4,450 early Thursday.

The metal's turnaround is attributed to renewed US Dollar weakness, falling US Treasury bond yields, and a better market mood. The Greenback has seen fresh selling pressure as Asian traders reacted negatively to Wednesday's weak ADP Employment Change report.

The ADP said on Wednesday that US private employment rose by 38,000 jobs last month after an upwardly revised 46,000 in July, missing the forecast for 48,000 job growth. Following the data release, markets slightly scaled back expectations for a US Federal Reserve interest rate hike in September to about 62% from 66% seen pre-ADP.

Gold traders will take cues from the US ISM Services PMI data and speeches from Fed officials for fresh trading incentives, particularly ahead of Friday's Nonfarm Payrolls (NFP) data. The headline NFP is expected to rebound by 58K in August following an unexpected decline of 23K in July.

TD Securities notes that economic data becomes increasingly important for precious metals, with gold at risk of CTA selling as markets head into Friday's US Non-farm Payrolls report. The firm cautions that the price reaction may be more prone to the downside on potential beats in the data, with gold nearing some CTA selling levels near $4,300/oz.