Gold Supported by Yen

 

Gold Prices Edge Higher as Yen Rally Weighs on Dollar, While Oil and Fed Expectations Limit Gains

Gold prices moved slightly higher on Tuesday as a sharp rally in the Japanese yen pressured the U.S. dollar and boosted demand for precious metals. However, persistent energy inflation risks and expectations of further Federal Reserve tightening continued to cap the metal’s upside potential.

Investors are also closely watching upcoming U.S. inflation data due later this week for fresh clues on the Federal Reserve’s next interest-rate decision.

As of 09:08 WIB, XAU/USD rose 0.5% to $4,430.40 per troy ounce, while Gold Futures were little changed at $4,475.61. Silver (XAG/USD) gained 0.9% to $66.79 per ounce, and platinum (XPT/USD) climbed 0.8% to $1,838.48. Meanwhile, the U.S. Dollar Index slipped 0.2% to 98.76.

Yen Surge Pressures Dollar, Supports Gold Prices

Gold recovered from losses recorded in the previous session as the Japanese yen extended its strong rally against the U.S. dollar.

The yen approached its strongest level of the year after continuing a surge that began last week. Traders increasingly expect the Bank of Japan to deliver another interest-rate hike, a move that has weighed heavily on the dollar and provided support for gold.

A weaker dollar makes dollar-denominated commodities more affordable for buyers using other currencies, helping to increase demand for precious metals despite ongoing macroeconomic challenges.

The latest rebound follows a sharp decline in gold prices last week. Since then, the precious metal has largely traded around the $4,400 level and remains within a relatively narrow range after rebounding from a July low near $4,000.

However, gains remain limited by inflation concerns linked to disruptions around the Strait of Hormuz. Oil prices climbed following renewed tensions between the United States and Iran, with Brent crude approaching the $100-per-barrel mark.

Fed Outlook and Inflation Data Remain Key Market Drivers

Markets continue to price in roughly a 60% probability that the Federal Reserve will raise interest rates next week, reflecting the impact of stronger-than-expected U.S. nonfarm payrolls data released last Friday.

Attention now turns to the upcoming U.S. Consumer Price Index (CPI) report, which could determine whether recent expectations for tighter monetary policy will remain intact.

Tony Sycamore, Senior Market Analyst at IG, noted that gold closed lower around $4,406 in the previous session, pressured by robust payroll data and rising energy prices.

According to Sycamore, this combination is likely to push U.S. Treasury yields higher when markets reopen, creating an additional headwind for non-yielding assets such as gold.

Meanwhile, continued buying from China’s central bank is helping to provide a floor for gold prices. The People’s Bank of China accelerated its gold purchases in August to the highest monthly level since 2023, underscoring sustained official-sector demand even as bullion prices remain near record highs.

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Gold Near $4,500

Gold Holds Near $4,500 After Rally as Traders Await Key U.S. Jobs Data

Gold prices remained near the $4,500-per-ounce mark on Friday after surging 2% in the previous session, as traders awaited the latest U.S. payrolls report for fresh clues on whether the Federal Reserve will keep interest rates unchanged this month.

A weaker U.S. dollar and comments from Federal Reserve Governor Christopher Waller helped support bullion prices. Waller indicated he could back a pause in rate hikes if inflation continues to ease, while investors now look ahead to Friday’s employment data and next week’s inflation figures for further policy guidance.

As of 09:18 WIB, XAU/USD was up 0.3% at $4,484.27 per ounce, while Gold Futures traded near $4,530. Silver (XAG/USD) hovered around $65.8 per ounce, and platinum (XPT/USD) traded close to $1,775. Meanwhile, the U.S. Dollar Index slipped to around 99.4.

Waller Cools Fed Rate Hike Expectations as Inflation Eases

Gold rebounded nearly 2% on Thursday, snapping a three-session losing streak and extending gains into Friday. The rally gained momentum after Waller stated that he could support keeping rates unchanged at the Federal Reserve’s September 15–16 meeting if incoming data confirms that inflation continues to cool.

Waller emphasized that August inflation data will play a crucial role in shaping his decision. While he remains open to further rate increases should price pressures reaccelerate, he noted that recent data finally show meaningful signs of disinflation.

Following his remarks, markets sharply reduced expectations for a September rate hike. The probability of an increase has fallen to roughly 50%, compared with about 70% earlier this week.

Lower interest rates generally benefit gold because the precious metal does not generate yield, reducing the opportunity cost of holding bullion when borrowing costs decline.

The U.S. dollar also weakened after the Japanese yen surged nearly 2% on Thursday, marking its strongest performance since coordinated intervention by Japanese and U.S. authorities roughly a month ago. The move has kept traders alert to the possibility of further action from Tokyo.

A softer dollar makes gold more affordable for buyers using other currencies, providing additional support for prices.

Payrolls, Inflation Data, and Technical Levels in Focus

Friday’s U.S. nonfarm payrolls report is now the next major test for the interest-rate outlook and could significantly influence gold’s short-term direction.

The latest rebound follows a sharp selloff earlier in the week, when gold dropped to around $4,282 per ounce, its lowest level in nearly four weeks, before staging a strong recovery.

Tony Sycamore, Senior Market Analyst at IG, said gold’s recent advance has been supported by easing pressure from energy prices, Treasury yields, and the U.S. dollar. Signs that the latest escalation in the Middle East may have peaked have also helped improve overall market sentiment.

According to Sycamore, gold remains above its late-June low of $3,942 per ounce, reinforcing his medium-term view that the metal has established a solid base around that level.

Although a break below the 200-day moving average near $4,526 last week caused some short-term technical damage, he believes the broader bullish outlook remains intact.

Gold also remains highly sensitive to developments in the Middle East. Earlier conflict-driven spikes in oil prices reignited inflation concerns and weighed on market sentiment. However, the recent moderation in energy prices has helped reduce those inflationary pressures, providing a more favorable backdrop for precious metals.

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Gold Rebounds Higher

Gold Surges Over 1% as Weaker Dollar and Lower Yields Boost Demand

Gold prices climbed more than 1% on Thursday, reclaiming the $4,400-per-ounce level as a weaker U.S. dollar and declining Treasury yields eased some of the pressure on the precious metal caused by recent expectations of higher Federal Reserve interest rates.

Investors are now focused on Friday’s U.S. nonfarm payrolls report for clues about the Fed’s next major policy move. The dollar’s decline, coupled with a sharp rally in the Japanese yen, provided additional support for gold amid ongoing concerns over potential currency market intervention.

As of 15:58 WIB, XAU/USD rose 1.1% to $4,436.50 per ounce, while Gold Futures gained 1.5% to $4,482.61. Silver (XAG/USD) advanced 0.9% to $65.94 per ounce, while platinum (XPT/USD) climbed 1.1% to $1,779.24. Meanwhile, the U.S. Dollar Index slipped 0.4% to 99.21.

Fed Signals Cooling Inflation as Job Growth Slows

Comments from New York Federal Reserve President John Williams gave investors fresh reasons to reassess the interest-rate outlook.

Williams said there is growing evidence that U.S. inflation continues to moderate as the impact of tariffs fades. He also noted that higher energy prices have not significantly spread into the broader services sector.

Recent labor market data reinforced that softer economic picture. According to the latest ADP employment report, U.S. companies added just 38,000 jobs in August.

The slower pace of hiring has further reduced expectations of aggressive monetary tightening by the Federal Reserve.

However, these developments contrast with the more hawkish tone struck by Fed Chair Kevin Warsh during his Jackson Hole speech last week.

Warsh’s remarks fueled speculation that the central bank could raise interest rates to keep inflation under control when policymakers meet in roughly two weeks.

Trump Signals Limited Strike as Oil Rally Loses Momentum

Gold’s rebound extended into a second session after the precious metal touched its lowest level in nearly four weeks on Wednesday. The latest recovery has been supported by a weaker dollar and easing U.S. Treasury yields, reducing two major headwinds that had weighed on bullion prices.

Former President Donald Trump indicated that the latest U.S. military action against Iran would likely be brief. His comments helped cool the recent rally in oil prices and eased some inflation concerns that had pressured gold.

Nevertheless, the renewed conflict has revived fears of a broader and more prolonged regional confrontation. Continued disruptions to global energy supplies could push oil prices higher, potentially fueling inflation and making the Federal Reserve more reluctant to loosen monetary policy.

Higher interest rates typically weigh on gold because the metal does not generate income. When bond yields and policy-rate expectations rise, investors often find income-producing assets more attractive than non-yielding bullion.

Gold had already gained as much as 1.6% on Wednesday, supported by a weaker U.S. dollar following a sharp surge in the Japanese yen. 

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