Gold prices moved higher on Wednesday, returning above $4,400 an ounce after three consecutive sessions of declines as the U.S. dollar weakened and investors assessed the outlook for Federal Reserve interest rates and developments in the Middle East.
At 22:04 ET (06:04 GMT), spot gold rose 1.1% to $4,402.41 an ounce, while gold futures gained 0.2% to $4,445.85.
Other precious metals also advanced. Spot silver increased 1.5% to $66.76 an ounce and platinum rose 1.6% to $1,848.23. The U.S. Dollar Index declined 0.2% to 98.70.
Gold recovers after three sessions of declines
Spot gold’s advance followed a cumulative decline of 2.6% over the previous three sessions.
The metal remained below levels recorded last week after stronger U.S. employment data increased market expectations that the Federal Reserve could raise interest rates at its September 14-15 meeting.
Markets were pricing in approximately a 60% probability of a Fed rate increase this month.
Interest rate expectations are relevant for precious metals because gold does not generate interest income, while higher bond yields can increase the relative returns available from interest-bearing assets.
Investors are now awaiting U.S. inflation figures scheduled for later this week for further indications about the potential direction of Federal Reserve policy.
Oil prices and Middle East developments remain in focus
Markets were also assessing developments in the Middle East and their potential implications for energy prices and inflation.
U.S. forces recently destroyed five Iranian oil tankers carrying crude near Kharg Island, Iran’s main oil export hub, following an attempted missile attack on a U.S. warship.
Brent crude remained close to $100 a barrel, keeping energy prices among the factors being monitored ahead of the Federal Reserve meeting.
ANZ analysts said investors appeared to be reducing their exposure to gold ahead of the Federal Open Market Committee meeting as higher energy prices contributed to rising bond yields. The analysts also noted that central-bank gold purchases had continued.
China’s central bank purchased approximately 650,000 ounces of gold in August, its largest monthly addition since 2023.
Gold has traded in a relatively narrow range around $4,400 since recovering from levels around $4,000 in July. The recent decline took the metal below its 200-day moving average, while markets continue to monitor central-bank purchases, bond yields, energy prices and Federal Reserve policy.