Gold price holds above $4,300 as rate-hike bets fade

AI desk brief

Gold held above $4,300/oz after weaker-than-expected US hiring data and easing Middle East tensions pushed traders to pare back September rate-hike bets. The most-active Comex December contract was at $4,301/oz, flat after Wednesday’s 4% jump and the strongest level since June 17. Bullion is up about 25% year over year, though still around 23% below its late-January record near $5,600.

The macro backdrop is doing the heavy lifting: ADP showed just 44,000 private-sector jobs added in July versus roughly 70,000 expected, while progress toward reopening the Strait of Hormuz has helped pull oil prices down about 10% this week and ease inflation fears. Fed Governor Lisa Cook kept hawkish optionality alive, saying policymakers remain prepared to raise rates if inflation does not cool, but the market is now focused on Friday’s non-farm payrolls as the next key catalyst.

Flow and positioning remain mixed beneath the price strength. The World Gold Council said Q2 global gold demand fell to 942 tonnes, the weakest since late 2021, as investment demand roughly halved and gold-backed ETFs lost about 45 tonnes. That weakness was partly offset by 289 tonnes of central bank buying, about 1.6x last year’s pace, with Chinese institutional investors also adding to gold-backed funds. A soft payrolls print would likely extend the rally; a strong report could quickly revive tightening expectations and pressure bullion.