Gold Stabilizes Near $4,400 as Easing Inflation Fears Temper Fed Rate Hike Bets

Gold prices held steady near $4,400 an ounce in early trading Thursday, maintaining gains from a 1% rebound in the previous session. The stabilization comes as comments from U.S. President Donald Trump and a key Federal Reserve official, coupled with soft labor market data, eased investor concerns over persistent inflation and the central bank's next policy move.

As of 20:34 ET (00:34 GMT), spot gold (XAU/USD) was little changed at $4,384.21 an ounce, while gold futures gained 0.3% to $4,429.21, according to Investing.com data.

Fed Rate Path Reassessed

Recent developments have prompted investors to temper expectations for aggressive monetary tightening. New York Federal Reserve President John Williams said there is evidence that U.S. inflation is continuing to ease, noting that the impact of tariffs is fading and higher energy prices are not spreading into other services.

This sentiment was reinforced by fresh labor market data. The ADP employment report showed that U.S. companies added just 38,000 jobs in August, a moderate pace of hiring that suggests a cooling economy. These factors contrast with a more hawkish stance taken by Fed Chair Kevin Warsh at the Jackson Hole symposium, which had previously lifted expectations for a rate hike.

Ad

Geopolitical Tensions and Dollar Headwinds

Bullion also found support as geopolitical fears receded. President Trump reportedly signaled that recent U.S. military strikes on Iran would likely be short-lived. His comments helped slow a recent rally in oil prices, reducing a key source of inflationary pressure that could have compelled the Fed to maintain a restrictive policy stance.

Higher interest rates typically weigh on non-yielding assets like gold. A weaker U.S. dollar also provided a tailwind for the precious metal, making it more attractive for holders of other currencies.