Gold prices (XAU/USD) rebounded to around $4,045 during the early Asian session on Thursday, recovering from a near seven-month low as traders digested recent comments from Federal Reserve Chairman Kevin Warsh and anticipated the upcoming US Non-Farm Payrolls (NFP) data for June, scheduled for release later on Thursday [1]. At the European Central Bank’s annual forum in Portugal on Wednesday, Warsh noted that inflation expectations had moderated over the past month and reiterated the Fed’s commitment to restoring price stability. He emphasized that policymakers are not in a rush to raise interest rates, which has been interpreted as a less hawkish stance [1].
This softer tone from Fed officials has supported gold by lowering the opportunity cost of holding the non-yielding asset, weakening the US Dollar, and driving down bond yields [1]. Krishna Guha of Evercore commented, “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” [1].
Additionally, positive developments in US-Iran negotiations have contributed to gold’s upside. Qatar reported on Wednesday that US and Iranian negotiators made “positive progress” on issues related to the memorandum of understanding, with both sides agreeing to continue discussions. US Vice President JD Vance stated that talks in Doha are “going well” and that discussions about the nuclear issue would begin soon [1].
Market participants are closely watching the US NFP data for further direction, as it could influence the Fed’s future policy decisions and, consequently, gold prices [1].
CONCLUSION
Gold has rebounded on the back of a softer Fed stance and positive US-Iran talks, with traders awaiting the US NFP data for further cues. The market currently perceives reduced odds of an immediate Fed rate hike, which has supported gold prices. The upcoming employment data remains a key focus for market participants.