BY COMFORT OGBONNA
Gold prices extended their gains for a third consecutive session on Wednesday, reaching a one-month high as a weaker U.S. dollar and declining oil prices boosted demand for the precious metal. Investors remained focused on upcoming U.S. employment data for signals about the future path of interest rates.
Spot gold rose 2.4% to $4,175.53 per ounce by 0640 GMT, marking its highest level since July 7. U.S. gold futures also moved higher, gaining 2% to $4,235.30 per ounce.
The decline in the U.S. dollar helped support gold prices by making the metal less expensive for investors holding other currencies. At the same time, continued weakness in crude oil prices reduced concerns about inflation pressures, influencing expectations for future monetary policy decisions.
Oil prices extended their losses after sharp declines in the previous two trading sessions as investors reacted to signs of possible diplomatic progress in the conflict involving the United States and Iran. Qatar said mediators had made progress toward efforts to end the conflict, although Iranian officials rejected claims that formal negotiations had already begun.
Analysts said developments in energy markets remain closely connected to gold prices because oil movements can influence global inflation expectations. A clearer path toward reducing geopolitical tensions could affect investor demand for safe-haven assets, including gold.
Gold traditionally performs well during periods of economic uncertainty, but the metal can face pressure when interest rates remain high because it does not provide interest income. Recent market pricing showed investors lowering expectations for a Federal Reserve rate increase at the September policy meeting, with the probability falling to about 59% from 67% a day earlier.
Federal Reserve officials continued to signal that future policy decisions would depend on incoming economic data. Philadelphia Federal Reserve President Anna Paulson said she remained open to different policy outcomes as officials evaluate inflation trends and broader economic conditions.
Investors are now awaiting employment data, including a private-sector jobs report and the closely watched monthly payrolls report due later in the week. The figures are expected to provide further insight into the strength of the U.S. labor market and help shape expectations for Federal Reserve policy.
Analysts said gold could remain within a relatively narrow trading range near current levels as markets wait for additional economic signals.
Other precious metals also posted gains. Spot silver increased 3.8% to $61.76 per ounce, while platinum climbed 2.6% to $1,779.25 after reaching its highest level since mid-June. Palladium also advanced 2.6% to $1,389.15 after touching a two-month high.
Investors will continue monitoring currency movements, inflation indicators, geopolitical developments and central bank decisions as they assess the outlook for precious metals in the coming weeks.
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