Gold Rebounds To Near $4,050 On Softer Fed Stance, US NFP Data In Focus

Gold price (XAU/USD) gains momentum to around $4,045 during the early Asian session on Thursday. The precious metal recovers from near seven-month low as traders assess fresh remarks from Federal Reserve (Fed) Chairman Kevin Warsh. All eyes will be on the US employment data for June, which is due later on Thursday.

During the European Central Bank’s annual forum in Portugal on Wednesday, Warsh said that inflation expectations had moderated over the past month. He also reiterated the Fed’s commitment to restoring price stability, reinforcing expectations policymakers are in no rush to raise interest rates.

A less hawkish tone from Fed officials provides some support to the non-yielding bullion by lowering the opportunity cost of holding it, weakening the US Dollar (USD), and driving down bond yields.

“At a minimum, his comments provided no fuel for speculation on a near-term July rate hike, and in our view suggest the new Fed chair – while keeping all options open meeting by meeting – does not currently see cause for an immediate hike,” said Krishna Guha at Evercore.

Furthermore, positive developments surrounding US-Iran talks contribute to the Gold’s upside. Qatar said on Wednesday that US and Iranian negotiators made “positive progress” on issues tied to the memorandum of understanding, with both sides agreeing to continue discussions. Meanwhile, US Vice President JD Vance stated that talks in Doha are “going well” and that discussions about the nuclear issue would start soon.