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Gold rallies above $4,200 as weaker US labor data dims rate-hike bets
ADP Employment Change rose 44K in July, below forecasts, while CME FedWatch showed the chance of a September rate hike falling to 56.9% from 67.2% the prior day.
Gold prices surged more than 3.5% on Wednesday, pushing XAU/USD to around $4,230, its highest level since June 18, as softer-than-expected US labor data weighed on the US Dollar and shifted expectations for Federal Reserve policy.
ADP Employment Change increased 44K in July, missing the 70K estimate and slowing from 98K in June. The report followed Tuesday’s weaker JOLTS Job Openings data, leaving traders focused on Friday’s Nonfarm Payrolls for more labor market signals.
Lower oil prices, linked to hopes of reopening the Strait of Hormuz, also helped ease inflation concerns and support bullion. ING said lower energy prices have eased some inflation worries, even as markets continue to evaluate the outlook for US monetary policy.
Rate-hike odds weakened further, with the CME FedWatch Tool showing the September hike probability at 56.9%, down from 67.2% a day earlier. The gold move comes as attention also turns to US-Iran talks, with Trump saying discussions with Iran were “very good” and that the Strait “is going to be open very soon.”
Latest closeGold $4,133.60 ▲2.5%