Gold extended its advance to around $4,200 an ounce on Wednesday, its highest level since June 18, as easing geopolitical tensions and softer US labor market data strengthened expectations for a less aggressive Federal Reserve. President Donald Trump said the US and Iran held “very good discussions” on Tuesday, fueling hopes of an agreement to end their five‑month standoff. The prospect of restored energy supplies from the Middle East has driven oil prices down about 10% this week, easing inflation worries and tempering forecasts for additional Fed tightening.
At the same time, the ADP Employment Report showed the US economy added only 44,000 private‑sector jobs in July, the weakest reading since January and well below the consensus forecast of 70,000. Following the data, traders put the probability of a Fed rate hike in September at 57%, down from 67% the previous day. Even so, Kansas City Fed President Jeff Schmid said some further policy tightening may still be necessary to return inflation to the central bank’s 2% target.
