Gold prices rose on Thursday as the US dollar weakened and Treasury yields declined, improving the near-term backdrop for the precious metal ahead of closely watched US employment data.
Spot gold traded at $4,409.97 an ounce by 02:19 GMT, while US gold futures stood at $4,455.30 an ounce. The move followed a recovery in the previous session after gold had fallen to its lowest level in nearly a month.
The main support came from movements in the dollar and US bond market. A weaker dollar can make gold less expensive for buyers using other currencies, while lower Treasury yields reduce the opportunity cost of holding an asset that does not pay interest.
These factors have helped gold regain some ground after recent pressure, although the next major move is likely to depend on US labour-market data and its impact on expectations for Federal Reserve policy.
Attention is now focused on Friday’s US nonfarm payrolls report. The figures are expected to provide a clearer indication of labour-market strength and could influence expectations for the future path of US interest rates.
Recent private-sector employment data showed continued job creation in August, but the official payrolls report remains the more important short-term catalyst. Strong employment data could support expectations that interest rates will remain restrictive, which may put upward pressure on the dollar and bond yields. Weaker figures could increase expectations of a more accommodative policy outlook, potentially providing further support for gold.
Changes in the dollar, Treasury yields and interest-rate expectations are likely to remain central to pricing as markets assess whether the latest rebound can continue.
Cora Gold Ltd (LON:CORA), together with its subsidiaries, explores for and develops mineral projects in West Africa. The company primarily explores for gold deposits. Its flagship project is the Sanankoro Gold project located in the Yanfolila Gold Belt, Southern Mali.
