(RTTNews) – Gold prices have inched higher on Wednesday, moderately offsetting the three previous sessions of losses, after weaker-than-expected U.S. private jobs data lowered the expectations of a rate hike by the U.S. Federal Reserve due to the re-escalation in the U.S.-Iran conflict.
Front Month Comex Gold for October month delivery has moved higher by $15.00 (or 0.34%) to $4,377.80 per troy ounce.
Front Month Comex Silver for October month delivery has also inched higher by $0.186 (or 0.29%) to $65.035 per troy ounce.
On the economic front, Automatic Data Processing data revealed that private employers added 38,000 jobs in August, the lowest since January, following an upwardly revised increase of 46,000 in July and below forecasts of 47,000.
The figures reflected a widespread slowdown in the labor market. While large companies added 34,000 jobs, those with fewer than 50 employees added 3,000.
Expectations for a rate hike in the upcoming September meeting of the U.S. Federal Reserve subsequently fell from nearly 68.20% yesterday to 64.20% today.
An ADP reading below forecasts is generally counted as bearish for the U.S. dollar and gold prices received upside support.
Usually, a stronger U.S. dollar suppresses the price of gold, while a weaker dollar makes it more accessible for overseas buyers and pushes its price higher.
Market participants are awaiting the nonfarm payrolls data release on September 4 to get insights on the health of the labor market as well as a sense of how the economy is moving.
Yesterday, U.S. President Donald Trump announced that U.S. forces began a barrage of strikes on several targets in Iran, seeking to remove Iranian threats both to commercial shipping in the Strait of Hormuz as well as to American service members.
Iranian media reported blasts in Qeshm Island, Bandar Abbas, Chabahar, and Konarak.
Trump warned that if Iran retaliates, the U.S. will hit them back strongly causing intense damages.
Dismissing Trump’s threat, Iran retaliated by targeting U.S. bases in Bahrain, Iraq, Jordan, and Kuwait.
Yesterday, Iran’s President Masoud Pezeshkian stated that Iran is ready to honor the June 17 U.S.-Iran Memorandum of Understanding provided the U.S. is also prepared.
Today, Trump argued through Truth Social that the U.S. is in too commanding of a position to even care about forcing Iran for a bargain, indicating that the U.S. is unwilling to return for negotiations.
Repeating his claim that the Iranian economy is collapsing, Trump reiterated that the U.S. is in total control of the Strait of Hormuz and asserted that all the sea mines planted by Iran during the start of the war have been either removed or detonated.
On August 24, at the direction of Trump, U.S. Treasury Secretary Scott Bessent announced Operation Economic Outcast, an economic campaign against Iran as well as its enablers.
These moves were seen as a shift from the earlier U.S. strategy to pursue military offensives against Iran to force the nation to reopen the Strait of Hormuz. Analysts were relieved of concerns of a war in the gulf.
Suddenly on Sunday, U.S. forces launched strikes on Larak Island. In response, Iran targeted two U.S. airbases in Jordan.
Trump vowed to strike Iran harder for targeting U.S. bases following which yesterday’s second round of offensives commenced.
With the Strait of Hormuz effectively shut, concerns of inflation in the U.S., and the resultant compulsion for the U.S. Federal Reserve to increase rate hikes weighed on gold prices.
On the economic front, the Mortgage Bankers Association of America revealed that the Purchase Index in the U.S. increased to 157.80 on August 28 from 154.40 of the previous week.
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