FX.co ★ Gold Holds Advance on Waller Remarks

Gold hovered near $4,500 an ounce on Friday after advancing for two straight sessions, supported by dovish remarks from Federal Reserve Governor Christopher Waller that prompted markets to dial back expectations for a September rate hike. Waller indicated he would favor leaving interest rates unchanged if inflationary pressures continue to ease. Following his comments, traders priced in roughly a 50% chance of a rate increase in September, down from about 63% the previous day. Investors are now focused on Friday’s nonfarm payrolls report and next week’s inflation figures for further guidance on the Fed’s policy trajectory. The US dollar and Treasury yields dropped sharply after Waller’s remarks, providing additional support for gold. At the same time, oil prices were on track for a strong weekly gain amid persistent conflict in the Middle East and growing uncertainty over shipping through the Strait of Hormuz, keeping inflation risks in the spotlight.