Gold Hits 7-Week High
Gold prices strengthened again during Thursday's trading (Aug 6), reaching a seven-week high. Spot gold rose approximately 0.6% to US$4,271 per troy ounce, marking its fourth consecutive session of gains.
The rise in gold prices was supported by optimism regarding the reopening of the Strait of Hormuz. Hopes for a deal between Iran and Oman drove oil prices down, thereby easing concerns about inflation.
Reduced inflationary pressure led the market to scale back expectations for a Federal Reserve interest rate hike. The probability of a rate hike in September fell to around 55%, down from 67% over the previous two days.
Gold typically becomes less attractive when interest rates are high because it does not yield a return; consequently, diminished expectations for rate hikes serve as a positive factor for gold prices.
The market is now awaiting US Nonfarm Payrolls (NFP) data scheduled for release on Friday. Earlier ADP private payroll data indicated a slowdown in hiring, raising the possibility that the NFP figures could also come in weaker than expected.
Newsmaker Analysis: The trend for gold remains bullish, though the risk of a correction persists given the sharp price rally. Weak NFP data could push gold past the US$4,300 mark, whereas strong data might trigger profit-taking and drive prices back down.
Source: Newsmaker.id
