Gold Rises on Dollar Weakness
Amidst a rapidly evolving market scenario, gold experienced a notable surge on Thursday, propelled by a retreat observed in both the dollar and Treasury yields. This significant movement stems from expectations of imminent interest rate cuts in the United States, with speculation intensifying that these adjustments could begin as early as September. Investor attention remained fixed on the imminent release of U.S. non-farm payroll data, further shaping market sentiment.
Spot Gold Surges
Spot gold surged by 0.8% to reach $2,373.31 per ounce as of 0258 GMT, following a 1% increase in the previous session. Complementing this, U.S. gold futures rose by 0.7% to $2,392.80, underscoring the bullish trend in the precious metals market.
Dollar Index Dips
The dollar index experienced a 0.2% decline, hovering close to a near two-month low. Benchmark U.S. 10-year Treasury yields remained near their lowest levels in over two months, reflecting the prevailing market sentiment favoring gold.
Analyst Insights
Tim Waterer, chief market analyst at KCM Trade, highlighted the subdued interest in the US dollar among buyers, attributing it to the soft ADP figures ahead of the non-farm payroll data. This sentiment shift provided a conducive environment for gold's upward trajectory. Moreover, Waterer emphasized the bullish outlook for gold as anticipation builds around potential Fed rate cuts in the latter half of the year, while also acknowledging the $2,300 level as a potential downside target if the non-farm payrolls data proves exceptionally robust.
Anticipation Builds Ahead of Non-Farm Payroll Data
The decline in hiring by US private employers to a four-month low in May further fueled expectations of a cooling job market. With all eyes now on the non-farm payroll data due on Friday, market participants eagerly await further insights into the economic landscape.
Forecasts of Fed Rate Cuts
A Reuters poll indicates a prevailing sentiment among forecasters that the Federal Reserve will implement key interest rate cuts in September and possibly once more later in the year. This anticipation aligns with the broader market expectation of reduced opportunity costs associated with holding non-yielding assets like gold.
Precious Metals Performance
Spot silver saw a notable uptick, rising by 1.8% to $30.54 per ounce, while platinum and palladium also registered gains of 1.2%, reaching $1,003.95 and $942.75 per ounce, respectively.
