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Gold rebounds as yen strengthens and USD selling pressures deepen
Gold (XAU/USD) reversed earlier losses to trade about 1.3% higher, supported by a pullback in US Treasury yields while USD/JPY dropped nearly 1.0%.
Gold prices rebounded sharply on Wednesday, reversing earlier losses as a sudden rise in the Japanese yen pressured the US dollar. XAU/USD was last around $4,386, up nearly 1.3% on the day after falling to an intraday low near $4,282, its lowest level since August 7.
The yen move was broad, with USD/JPY dropping after edging near the 160 level, last down nearly 0.95%. The broader weakness was also visible across other yen pairs, including EUR/JPY, GBP/JPY, and AUD/JPY, though there was no official confirmation that Japanese authorities intervened in FX markets.
The rebound also coincided with easing US Treasury yields. A pullback in yields provided additional support for the non-yielding metal, but yields were still close to recent highs, with the 10-year benchmark trading around 4.78% after briefly touching 4.81%.
Market sensitivity remains high, as weaker-than-expected US labour data weighed on the dollar and traders increased expectations that the Federal Reserve could act sooner. According to the CME FedWatch tool, the probability of a rate hike at the September 15 to 16 meeting stands around 70%, up from 36% a week earlier, according to FXStreet.
Latest closeGold $4,323.20 ▼1.2%|USD/JPY 158.21 ▲0.5%