Gold Bounces Off One-Week Low Near $4,340 on Soft USD; Upside Capped Ahead of US Inflation

Gold (XAU/USD) rebounds from a one-week low around the $4,340 area touched during the Asian session on Wednesday and, for now, seems to have snapped a three-day losing streak. The Bank of Japan–inspired rally in the Japanese Yen keeps the US Dollar depressed near its lowest level in over two weeks, which is seen benefiting the commodity. Hawkish central-bank expectations may keep a lid on any meaningful appreciation for non-yielding bullion.

Central banks; BNY on Fed

A 25 basis point rate hike by the European Central Bank on Thursday is considered a done deal. Traders have fully priced in a BoJ rate hike at the September 17–18 meeting. The Reserve Bank of Australia is also weighing a potential rate increase later this month. Better-than-expected US Nonfarm Payrolls revived bets for a September Fed hike amid inflation risks from persistently higher energy prices.

Strategists at BNY argue that after an exceptionally strong jobs print on Friday, expectation for a September hike is back to over 60%, and they would be surprised not to get one.

Middle East color; inflation data ahead

Escalating US–Iran tensions could help limit deeper losses for the safe-haven USD and cap gold. On the same source page: the US attacked Iranian oil tankers in the Gulf of Oman and near Kharg Island; Iran responded by firing over 30 missiles at US forces stationed at the Al Azraq base in Jordan; the IRGC warned ships in Kuwaiti and Bahraini ports hosting US forces could also be targeted. That keeps the geopolitical risk premium in play, lifting crude oil prices to a three-month high and fueling inflation fears.

Traders might await US PPI on Thursday and CPI on Friday for cues about the Fed path before placing fresh directional bets on XAU/USD.

Tuesday’s gold below $4,400 is the prior EU tape. Also CENTCOM five tankers and WTI above $92.

Informational only. Not trading advice, signals, or a guarantee of any market outcome.