(RTTNews) – Gold prices traded higher for a fourth straight session to hit a seven-week high on Thursday, driven by softer U.S. labor market data released overnight, a weaker dollar and lower Treasury yields.
Spot gold traded 0.6 percent higher at $4,272.01 an ounce, after having surged above $4,300 an ounce earlier in the session. U.S. gold futures were up 0.6 percent at $4,332.51.
The U.S. dollar index traded with a negative bias for the third straight session after overnight data showed U.S. private payrolls growth slowed in July.
Separate set of data showed U.S. manufacturing continued to expand in July, although momentum remained subdued. Services-sector activity growth came in slightly below market expectations.
After a few Fed officials advocated for some sort of monetary policy tightening to get inflation back to the target, investors now look ahead to the release of Friday’s all-important nonfarm payrolls report for additional clues on the economic and rate outlook.
Minneapolis Fed President Neel Kashkari told CNBC in an interview on Wednesday that he believed now is the time to “start slowly moving up” interest rates.
Separately, Federal Reserve Board Governor Lisa Cook said that inflation is still too high and she’s open to the idea of an interest-rate hike.
San Francisco Fed President Mary Daly fully endorsed the Fed’s decision to hold rates steady last week but warned that the central bank should act aggressively if inflation momentum appears to be building.
According to the CME’s FedWatch tool, futures markets are now pricing in a 54 percent chance of a rate hike in September, down from 67 percent from two days earlier.
On the geopolitical front, diplomatic efforts to ease tensions between the United States and Iran appear to have gathered pace.
U.S. President Donald Trump said “a lot of progress had been made” on the subject of reopening the Strait of Hormuz and a deal could be announced this week.
U.S. Vice President JD Vance told Fox News the Iranians are “extraordinarily difficult people”, describing the effort to end the war as “messy” and that “it’s going to take some time.”
Iran said it had reached an agreement with Oman on a proposed route for shipping through the Strait of Hormuz, making a potential step toward reopening of the critical waterway for energy supplies.
A joint statement from Tehran and Muscat is under review and in the final drafting stage, Iranian Foreign Ministry spokesman Esmail Baghaei said, adding a deal would be struck “if certain third parties do not obstruct this process.”
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