Gold futures approached $4,450 per ounce on Thursday, extending gains as expectations of further U.S. Federal Reserve interest rate hikes diminished and the dollar weakened.
The spot price for gold traded near $4,445, up roughly 0.4% on the day, as investors reassessed the likelihood of additional monetary tightening following recent softer U.S. economic data. The dollar index, which often moves inversely to bullion, fell 0.3%, reducing pressure on dollar-denominated gold.
Market sentiment also reflected caution ahead of Friday’s U.S. nonfarm payrolls report, which could influence near-term Fed policy expectations. While gold’s advance was supported by safe-haven demand amid ongoing geopolitical tensions, analysts warned that risks such as stubborn inflation and potential policy shifts remain.
Investors have increasingly priced out the probability of a Fed rate hike at the September meeting, with fed funds futures indicating a roughly 40% chance, down from about 60% a week ago. The shift has reduced the opportunity cost of holding non-yielding assets like gold, supporting its upward trajectory.
The precious metal’s resilience comes despite broader concerns over global growth and elevated bond yields, which typically weigh on gold. However, the combination of a softer dollar and reduced hawkish Fed bets has provided a supportive backdrop for the yellow metal’s recent advance.
