Gold faces a critical test as markets reprice Fed rate expectations - Business Standard

AI desk brief

Gold pulled back after its strongest month since January, having risen more than 10% in August to around $4,450/oz and briefly near $4,700 before slipping to about $4,430 in the first week of September. The reversal came as Fed repricing and a much stronger-than-expected US payrolls print of 162,000 versus 56,000 consensus pushed the dollar and yields higher, offsetting the earlier tailwind from softer crude, lower long-end yields, and ETF inflows.

Near term, gold is caught between a softer dollar backdrop — with the greenback near two-month lows around 98.6 — and firmer rate-hike expectations after the payrolls surprise. The article also notes a more hawkish BOJ tone ahead of the September 18 decision, which supported yen strength and helped weigh on the dollar independently of the Fed story.