Gold Recovers After Waller's Speech and Easing Tension Over U.S. Rate Hike

SadaNews - Gold continued its recovery following a speech by U.S. Federal Reserve Chair Kevin Waller that eased speculations about a possible interest rate hike this year to combat inflation.

The precious metal rose by as much as 0.9% trading around $4,060 an ounce, after closing up 0.6% in the previous session, ending two days of declines.

Waller's comments at the European Central Bank Forum in Portugal on Wednesday, which were less hawkish than feared, alleviated concerns about the Fed's upcoming steps, especially after the Iran conflict drove up energy prices and inflation indicators. Higher borrowing costs remain a pressure factor on non-yielding metals.

Waller also reiterated a message he delivered at his first press conference as Fed Chair last month that the central bank will achieve price stability, and he emphasized his determination to bring inflation back to its 2% target.

Diverse U.S. Data Shapes Gold's Path

Ahmad Assiri, an analyst at Pepperstone Group, stated that market sentiment "remains generally positive" for gold. However, he noted that the dollar is still relatively high, and Treasury yields have recovered most of their previous losses, indicating that "the market still struggles to gauge Waller's outlook as he refuses to provide future guidance."

The latest data paints a mixed picture of the U.S. economy. Manufacturing activity expanded for the sixth consecutive month in June, albeit at a slower pace. Meanwhile, job creation in the private sector was strong, marking the best three-month employment period in over a year. Job data set to be released on Thursday will provide more indicators.

Spot gold rose 0.5% to $4,052.03 an ounce by 9:38 a.m. in Singapore. Silver increased 1% to $59.74 an ounce. Platinum and palladium also advanced, while there was little change in the Bloomberg Spot Dollar Index, a measure of the U.S. currency.