Gold Edges Lower to $4,402 on Weakness

Price Movement

At 07:57 ET (11:57 GMT) the spot gold price (XAU/USD) slipped 0.1% to $4,402.49 an ounce, while gold futures (GC) fell 0.6% to $4,448.11. Silver (XAG/USD) traded flat at $66.17 an ounce and platinum (XPT/USD) rose 0.8% to $1,838.78. The U.S. Dollar Index was marginally lower at 98.93.

Currency Influence

The Japanese yen continued its sharp rally, approaching its strongest level of the year after a rally that began the previous week. Traders increasingly expect the Bank of Japan to raise rates, and the yen’s strength weakened the dollar, which normally has an inverse relationship with gold, thereby providing support to bullion prices.

Fed Outlook and Inflation Data

Markets are pricing roughly a 60% chance of a Federal Reserve rate hike next week, a sentiment reinforced by last week’s stronger non‑farm payrolls report. The immediate test will be the U.S. consumer‑price index (CPI) data due later this week, which could confirm whether the heightened rate‑hike expectations persist.

Analyst Commentary

Tony Sycamore, senior market analyst at IG, noted that gold finished lower overnight around $4,406, pressured by the strong payrolls report and higher energy prices. He expects the combination to push U.S. Treasury yields higher when markets reopen, creating another headwind for gold.

Oil and Geopolitical Risk

Inflation risks linked to disruptions around the Strait of Hormuz are limiting gold’s gains, as oil prices rose with Brent crude approaching $100 a barrel following renewed U.S.–Iran clashes.

China Central Bank Activity

The People’s Bank of China accelerated its gold purchases in August, reaching the highest monthly buying level since 2023, which continues to provide a floor for gold prices.

Contribution

The report was contributed by Vahid Karaahmetovic.