On Thursday (Sep 3), spot gold soared as dovish remarks from Federal Reserve Governor Christopher Waller hammered the US dollar. Gold prices remained firm during Friday’s ASIan session, trading near $4474 per troy ounce. FXStreet analyst Christian Borjon Valencia has published an article analysing gold price movements.
Valencia writes that ahead of US Non‑Farm Payrolls, dovish signals from Fed Governor Christopher Waller dampened rate‑hike expectations and sent gold prices sharply higher.
Spot gold closed Thursday skyrocketing $84.84, or 1.93%, at $4472.67 per troy ounce.
Waller stated on Thursday that he would favour advocating for steady interest rates at the Fed’s next monetary‑policy meeting if upcoming data confirms cooling inflationary pressures.
Traders now price roughly a 50‑percent chance of a rate hike at the Fed’s September 15‑16 policy meeting, down from around 63 % before Waller’s comments.
Nick Timiraos, the prominent financial journalist known as “the new Fed correspondent”, noted that Governor Waller’s core stance has not fundamentally shifted since July, yet his bias has clearly pivoted. Previously he leaned toward hawkish concerns and supported rate hikes; now he appears relatively optimistic and prefers keeping rates unchanged. Final outcomes will hinge on August inflation data.
Bob Haberkorn, senior market strategist at StoneX, commented: “I think traders now believe the Fed may not be so aggressive on interest‑rate policy. A growing number of market participants think the Fed may deliver only one more rate hike, after which there may be little room for further upward adjustments.”
Falling US Treasury yields support gold by lowering the opportunity cost of holding non‑yielding assets. A weaker US dollar also makes dollar‑denominated gold cheaper for overseas buyers.
Gold prices hit their lowest level since August 7 on Wednesday, yet closed more than 1 % higher as the US Dollar Index pulled back from near‑three‑week highs and US Treasury yields retreated from multi‑year peaks.
While gold is widely regarded as an inflation‑hedging instrument, rising interest rates normally reduce the appeal of this non‑interest‑bearing metal.
Valencia states that traders will next focus on Friday’s August US Non‑Farm Payrolls release. Market consensus expects employment to rise by 56,000 jobs, reveRSIng the prior reading of a 23,000‑job loss, while the unemployment rate is projected to hold steady at 4.1 %.
Gold Technical Analysis
Valencia points out that broad US‑dollar weakness drew buyers into the market, lifting gold prices above the September 1 high of $4461 per troy ounce, before accelerating toward the $4500 psychological level. The Relative Strength Index (RSI) shows market momentum has turned moderately bullish. The RSI indicator reflects rising buying power, hinting gold may extend its upward trajectory.
According to Valencia, a successful break above $4500 would target the 200‑day Simple Moving Average (SMA) resistance at $4533. A decisive breach of this level would open a move toward the $4600 threshold, followed by the August high of $4697.
(Spot Gold Daily Chart｜Source: FXStreet)
Valencia adds that on the downside, primary support for gold sits at the $4400 mark. A break below this level exposes subsequent support at the 100‑day SMA of $4358, the $4300 threshold, and the 50‑day SMA at $4232.
At 09:55 Beijing time, spot gold traded at $4474.42 per troy ounce.