Gold rose 2.3% to $4,488.54 per ounce on Thursday, reaching its highest level since August 28, after Federal Reserve Governor Christopher Waller said he would support leaving interest rates unchanged if inflation pressures continued cooling. U.S. gold futures settled 2.8% higher at $4,539.90. Traders cut their odds of a rate increase at the Fed's September 18-19 meeting to roughly 54% from about 62% before Waller's comments.
Lower Treasury yields and a weaker dollar both supported bullion prices. Gold yields no interest, making it less attractive when rates are high; falling Treasury yields reduced that opportunity cost. The decline in the dollar's value made gold, priced in dollars, more affordable for overseas buyers.
Bob Haberkorn, senior market strategist at StoneX, said traders were viewing the Federal Reserve as "less aggressive with rates." He added that traders increasingly believed the central bank might deliver one rate increase but had limited room for further tightening.
The market awaits the U.S. non-farm payrolls report on Friday and August consumer and producer price inflation data next week. Oil prices headed for a fourth day of gains amid concerns about Middle East supply disruptions following U.S. strikes on Iran and renewed Israeli threats against Tehran.
Silver gained 2.8% to $67.13 per ounce, platinum rose 4.2% to $1,830.28, and palladium climbed 5.9% to $1,426.75.
