Gold Gains Ground Amid Dollar Weakness and Rate Cut Expectations

Gold experienced a slight increase for the fourth consecutive session on Tuesday. This uptick was fueled by a weaker dollar and declining Treasury yields. Disappointing U.S. jobs data has bolstered anticipation of a potential interest rate cut in September.

Spot gold saw a rise of 0.1%, reaching $3,375.89 per ounce as of 0239 GMT. Similarly, U.S. gold futures increased by 0.1% to $3,430.40.

The dollar index remained close to a one-week low, making gold more attractive to investors holding other currencies.

The yield on the 10-year Treasury note, a benchmark, fell to its lowest point in a month.

OANDA senior market analyst Kelvin Wong noted, “Short-term momentum has shifted favorably…the core argument supporting gold prices is the expectation that the Federal Reserve will likely reduce rates in September.”

U.S. job growth in July was less robust than projected. Furthermore, non-farm payroll figures for May and June were significantly revised downward by 258,000 jobs, indicating a possible weakening in the labor market.

According to the CME FedWatch tool, market participants now foresee a 92% probability of a rate cut in September.

San Francisco Fed Bank President Mary Daly commented on Monday that, considering the growing evidence of a softening U.S. job market and the absence of persistent inflation driven by tariffs, the conditions for rate cuts are approaching.

Gold is traditionally regarded as a safe-haven asset during times of political and economic instability, and it tends to perform well in environments with low interest rates.

On the trade landscape, President Donald Trump reiterated his threat on Monday to raise tariffs on goods coming from India due to its purchases of Russian oil. New Delhi has responded by calling these remarks “unjustified” and pledging to protect its economic interests, thereby widening the trade gap between the two nations.

However, gold is encountering some technical barriers. Wong from OANDA stated, “I still do not see traders aggressively pushing above the $3,450 level unless a distinct catalyst propels gold prices beyond this point.”

In other markets, spot silver increased by 0.1% to $37.44 per ounce, platinum rose by 0.1% to $1,330.31, and palladium gained 0.2% to $1,204.25.