Market comment on behalf of Bas Kooijman is the CEO and Asset Manager of DHF Capital S.A
Gold prices remained relatively stable on Thursday, supported by a weaker US dollar as renewed diplomatic efforts between the United States and Iran improved market sentiment. Expectations that negotiations could reduce geopolitical risks and weigh on oil prices could ease concerns about inflation and provide a tailwind for gold prices.
However, global bond yields remain at elevated levels as market participants expect major central banks to tighten their monetary policy stance, providing a more challenging backdrop for bullion. In the United States, markets continue to price at least one interest rate increase before year-end. Expectations of further policy tightening also remain in place in Japan, while investors anticipate another rate hike from the European Central Bank.
Looking ahead, attention now turns to today’s US employment report. If Nonfarm Payrolls confirm signs of a cooling labour market, following yesterday’s weaker-than-expected ADP employment data, monetary policy expectations could soften, placing downward pressure on Treasury yields and providing further support for gold. Conversely, a resilient labour market reading could reinforce expectations of higher interest rates and limit the metal’s upside.
Zaid Barem / ymm
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