Spot gold rose above $4,400 an ounce on Wednesday as the U.S. dollar weakened, reversing part of the metal’s decline over the previous three trading sessions.
At 22:04 ET (06:04 GMT), spot gold was up 1.1% at $4,402.41 an ounce. Gold futures increased 0.2% to $4,445.85.
Silver and platinum also advanced, with spot silver gaining 1.5% to $66.76 an ounce and platinum rising 1.6% to $1,848.23. The U.S. Dollar Index declined 0.2% to 98.70.
Fed expectations remain a focus for precious metals
Gold’s advance followed a 2.6% decline over the preceding three sessions. Despite Wednesday’s recovery, prices remained below the levels recorded last week.
Recent U.S. employment data had increased expectations that the Federal Reserve could raise interest rates at its September 14-15 policy meeting. Market pricing indicated an approximately 60% probability of an increase this month.
Higher interest rates and bond yields can affect demand for gold because the metal does not pay interest, increasing the relative returns available from interest-bearing assets.
Attention is now turning to U.S. inflation figures due later in the week as markets assess their potential implications for the Federal Reserve’s next decision.
Energy prices add to inflation considerations
Developments in the Middle East also remained under scrutiny as investors assessed their implications for oil supplies and inflation.
U.S. forces recently destroyed five Iranian tankers carrying crude near Kharg Island, Iran’s main oil export hub, after an attempted missile strike against an American warship.
Brent crude remained close to $100 a barrel. Energy prices are among the factors being monitored by markets ahead of the Federal Reserve’s September meeting because changes in energy costs can affect headline inflation.
ANZ analysts said some investors appeared to be reducing gold exposure before the Federal Open Market Committee meeting, with higher energy prices contributing to increased bond yields. They also said central-bank demand for gold had continued.
China’s central bank adds 650,000 ounces in August
China’s central bank purchased approximately 650,000 ounces of gold during August, representing its largest monthly addition since 2023.
Central-bank purchases are one source of demand being monitored alongside movements in interest rates, currencies and investment flows.
Gold has remained around the $4,400 level since recovering from approximately $4,000 in July. Its latest decline took the price below the 200-day moving average.
Markets are now assessing U.S. inflation data, Federal Reserve policy expectations, bond yields, energy prices and continued central-bank purchases for indications of the factors affecting precious-metal prices.
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