Gold prices climbed sharply on Thursday, moving close to $4,500 an ounce as a weaker US dollar and easing Treasury yields supported demand for bullion.
Investors are now looking ahead to Friday’s US nonfarm payrolls report, which could provide the next major clue on Federal Reserve policy.
Gold Prices Rally as Dollar Weakens
Gold benefited from a softer US dollar, which makes the metal more attractive to buyers using other currencies.
At 08:16 ET, XAU/USD rose 1.2% to $4,474.77 an ounce, while gold futures advanced 2.4% to $4,521.61.
Silver also moved higher, with XAG/USD gaining 1.7% to $66.44 an ounce. Platinum rose 0.5% to $1,769.24.
Meanwhile, the US Dollar Index fell 0.5% to 99.08.
Treasury Yields Ease Ahead of US Jobs Data
Falling Treasury yields also helped support gold.
Lower bond yields tend to benefit bullion because gold does not pay interest. When yields decline, the opportunity cost of holding non-yielding assets becomes smaller.
The latest move comes ahead of Friday’s US nonfarm payrolls report, which could influence expectations for the Federal Reserve’s next policy decision.
Fed Officials Point to Easing Inflation
Federal Reserve Bank of New York President John Williams added to the softer interest-rate outlook.
Williams said there are signs that US inflation continues to ease as the impact of tariffs fades.
He also indicated that higher energy prices have not significantly spread into the broader services sector.
These comments encouraged investors to reassess expectations for future Federal Reserve policy.
ADP Jobs Data Shows Slower Hiring
Fresh labor market figures also pointed to a more moderate economic backdrop.
US companies added 38,000 jobs in August, according to the ADP employment report.
The slower pace of hiring reduced expectations for aggressive Federal Reserve tightening and added support to gold prices.
However, markets are still balancing those signals against the more hawkish tone recently delivered by Fed Chair Kevin Warsh.
Gold Rebounds From Four-Week Low
Gold’s latest rally extended into a second consecutive session after prices touched a near four-week low on Wednesday.
The rebound has been supported by a weaker dollar and lower Treasury yields, reversing two of the main pressures that had weighed on bullion.
Gold had already climbed as much as 1.6% on Wednesday as the dollar weakened following a sharp move higher in the Japanese yen.
Middle East Tensions Remain in Focus
Geopolitical developments also remain important for the gold market.
US President Donald Trump said the latest US strikes on Iran were likely to be short-lived. His comments helped slow the recent oil rally and reduced some inflation concerns.
A prolonged conflict could still create renewed pressure on energy markets.
Higher oil prices can increase inflation risks, potentially making the Federal Reserve less willing to ease monetary policy.
Why Interest Rates Matter for Gold
Gold tends to face pressure when interest rates and bond yields rise because the metal does not generate income.
When investors can earn higher returns from bonds and other interest-bearing assets, gold may become relatively less attractive.
The opposite can occur when yields fall, as seen in the latest session.
US Payrolls Report Becomes the Next Major Catalyst
The upcoming nonfarm payrolls report is now likely to be the next major driver for gold prices.
A weaker-than-expected jobs report could reinforce expectations for a softer Federal Reserve stance. In contrast, stronger employment data could revive concerns about higher interest rates.
For now, the combination of a weaker dollar, lower Treasury yields and easing inflation signals has helped gold regain momentum and move back toward the $4,500 level.
