Gold strengthened on Thursday as the dollar and Treasury yields retreated on growing bets that US interest rate cuts could begin as early as September, while investors awaited data on non-farm payrolls United States.
Spot gold was up 0.8% at $2,373.31 per ounce at 0258 GMT, after rising 1% in the previous session.
U.S. gold futures rose 0.7% to $2,392.80.
The dollar index fell 0.2%, hovering around a nearly two-month low, and benchmark 10-year U.S. Treasury yields remained near their weakest levels in more than two months.
“Buyers gave the US dollar some slack today after ADP weakness ahead of non-farm payrolls (NFP) data, which allowed the gold price to thrive,” said Tim Waterer, Chief Market Analyst at KCM Trade.
“The fundamental outlook still looks constructive for gold as we approach possible Fed rate cuts in the second half of the year. Although the $2,300 level could be challenged to the downside if we have a particularly strong NFP strong”.
Hiring by U.S. private employers slipped to a four-month low in May, adding to signs of a cooling labor market. Markets now await Friday’s NFP data for further clues.
The Federal Reserve will cut its key interest rate in September and again this year, according to a majority of forecasters in a Reuters poll that also showed significant risk of opting for just one cut or none.
Lower interest rates reduce the opportunity cost of holding unprofitable bullion.
Spot silver rose 1.8% to $30.54 an ounce, platinum rose 1.2% to $1,003.95 and palladium gained 1.2% to 942, 75 dollars.
