The weakening dollar supports gold prices
Increasing chances of a 0.5% Fed rate cut
Markets anticipate additional U.S. labor data
Gold prices climbed in European trading on Thursday, heading for a second consecutive gain and recovering from two-week lows, with the precious metal once again trading above $2500 an ounce.
The likelihood of a 0.5% Fed rate cut in September has continued to rise, as investors await key labor data later this week.
Gold Prices
Gold prices increased by 0.85% to reach $2,516 per ounce, with a session low of $2,493.
On Wednesday, gold saw a 0.15% rise, marking its first gain in four days and bouncing back from a two-week low of $2,471.
The rise in gold was further supported by a weakening dollar, following the release of weak US labor data.
The Dollar
The dollar index dropped by 0.15% on Thursday, marking its second consecutive session of losses against a basket of major currencies.
A weaker dollar lowers the cost of dollar-denominated gold futures for investors holding other currencies.
Weak Data
Recent data revealed that US job openings fell to a 3.5-year low in July, indicating a slowdown in the labor market.
Wells Fargo economists noted in a memo that this decline in job opportunities suggests a continued deceleration in the labor sector, which could lead to a cooling of inflation.
Following this data, the likelihood of a 0.5% rate cut by the Fed in September increased from 41% to 45%, while the probability of a 0.25% rate cut remained at 55%, according to the Fed watch tool.
Investors are now awaiting the critical US payrolls report on Friday for additional insights into the future direction of US monetary policy.
SPDR
Gold holdings in the SPDR Gold Trust were unchanged for the third consecutive day, remaining at 862.74 tones, the highest level since January 16.
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