Gold (XAU/USD) rose more than 1% on Wednesday, trading at $4,373, as the US Dollar softened amid speculation that Japanese authorities may have intervened in the foreign exchange market to support the Yen. While the Yen strengthened broadly, there was no official confirmation of intervention or a rate check by Japanese officials [1]. The US Dollar Index (DXY) fell 0.06% to 99.59, contributing to the upward momentum in gold prices, even as US Treasury yields remained firm, with the 10-year yield near 4.79% [1].
Geopolitical tensions also played a role, as recent comments from US President Donald Trump indicated the US is "prepared to do another attack on Iran," which led to a 0.10% increase in West Texas Intermediate (WTI) oil prices to $90.86. Despite higher energy prices, US yields showed little reaction, as markets anticipated that persistent inflation could prompt higher interest rates [1].
The Federal Reserve's Beige Book reported modest increases in economic activity and slight employment growth since early July, with prices rising in eight districts. Private-sector hiring in August was weaker than expected, with 38K jobs added versus a forecast of 47K and down from 46K in July, according to the ADP Employment Change National report [1]. New York Fed President John Williams commented that bond yields are being driven by a solid economy rather than inflation expectations, and he believes current monetary policy is appropriate to achieve the Fed's 2% inflation target [1].
Looking ahead, markets are focused on upcoming US jobs data, the ISM Services PMI for August, and the Nonfarm Payrolls report on Friday. Technically, gold reclaimed the 100-day Simple Moving Average at $4,361, with resistance at $4,400 and potential to challenge $4,450 and $4,500 if the rally continues. However, the Relative Strength Index (RSI) remains below 50, suggesting short-term bearish momentum, with support at $4,300 and further downside targets at $4,223 and $4,200 [1].
CONCLUSION
Gold's rise above 1% reflects a combination of a weaker US Dollar, speculation around Japanese Yen intervention, and ongoing geopolitical risks. While technical indicators suggest short-term bearish momentum, upcoming US economic data could influence the next move. Market participants remain cautious ahead of key releases later in the week.