Investors Anticipate Fed Rate Cuts Amid Rising Gold Prices

Gold prices strengthened on Thursday as the US dollar and Treasury yields retreated amid growing expectations of potential interest rate cuts starting in September. Investors were eagerly anticipating the release of the US non-farm payrolls data. Spot gold saw an increase of 0.8% to $2,373.31 per ounce, following a 1% rise in the previous session. US gold futures also climbed by 0.7% to $2,392.80.

The dollar index dipped by 0.2%, remaining close to a nearly two-month low, while US 10-year Treasury yields hovered near their lowest levels in over two months. Market sentiment towards the US dollar was subdued, particularly after disappointing ADP data preceding the non-farm payrolls report, which bolstered the price of gold.

Analysts suggest a positive outlook for gold as the possibility of Federal Reserve rate cuts in the latter part of the year looms. However, there is a concern that a robust NFP figure could potentially push gold prices towards the $2,300 mark. Hiring by US private employers slowed to a four-month low in May, indicating a cooling job market.

Market participants are now eagerly awaiting the NFP data release for further insights. A Reuters poll indicates that a majority of forecasters expect the Federal Reserve to lower its key interest rate in September and possibly once more before the year ends. Lower interest rates diminish the opportunity cost of holding non-interest-bearing assets like gold.

Meanwhile, spot silver surged by 1.8% to $30.54 per ounce, platinum rose by 1.2% to $1,003.95, and palladium gained 1.2% to reach $942.75.

With gold prices on the rise due to expectations of interest rate cuts and market uncertainties, investors are closely monitoring economic indicators like the NFP data. The potential impact of Federal Reserve decisions on precious metal prices remains a key focus for market participants. As silver, platinum, and palladium also experience gains, the precious metals market continues to attract attention amidst evolving economic conditions.