(RTTNews) - Adding to the moderate gains made during yesterday's session, gold prices have soared on Thursday after dovish comments by Federal Reserve Governor Christopher Waller. In addition, yesterday's weaker-than-expected jobs data clouded the expectations for a rate hike.
Front Month Comex Gold for October month delivery has surged by $119.00 (or 2.72%) to $4499.70 per troy ounce.
Front Month Comex Silver for October month delivery has also soared by $2.241 (or 3.450%) to $67.180 per troy ounce.
Yesterday, American Data Processing's National Employment Report revealed that the U.S. private sector added 38,000 jobs in August, the lowest since January, following an upwardly revised 46,000 in July and below forecasts of 47,000.
Data indicated that firms were more selective in who they add to their payrolls. While large companies added 34,000 jobs, those with fewer than 50 employees, added only 3,000.
After a hawkish speech by U.S. Federal Reserve Chair Kevin Warsh last Friday at the Jackson Hole Symposium, investors raised their bets on interest rate hikes by the Fed. However, following yesterday's U.S. job numbers, forecasts for a rate hike by the Fed have fallen.
The U.S. Dollar Index was last seen trading at 98.87, down by 0.72 (or 0.72%).
Today, the U.S. Labor Department's data showed that the number of people claiming unemployment benefits inched up by 2,000 to 206,000 for the fourth week of August.
The numbers came in roughly in line with market expectations of 205,000, holding the trend of low claim counts since dropping to the near 60-year low of 189,000 in the middle of July.
Continuing jobless claims increased to 1,779,000 for the week ending August 22 from 1,771,000 of the previous week.
Focus has now turned to the nonfarm payroll report to be released tomorrow. If the report misses expectations, bets on rate cut hike could decline, supporting gold prices on the upside.
Contrasting Warsh's speech, today U.S. Federal Reserve Governor Christopher Waller stated that he is inclined to keep rates steady provided there are no inflation shocks from the upcoming data next week.
Waller added that only if inflation is high, would he opt for considering a rate hike.
Waller's remarks suggest that an interest rate later this month may not be a done deal.
Before the next meeting of the Fed, the only major inflation reports to be released are the Consumer Price Index and the Producer Price Index from the U.S. Bureau of Labor Statistics.
According to the CME Group's FedWatch Tool, investors are betting on a 52.40% chance of a 25-basis-point interest rate-hike at the upcoming meeting of the U.S. Federal Reserve on September 15-16, while the odds on rates being held at the current level stand at 47.60%.
Entering day number 189, the Middle East war between the U.S. and Iran rages on.
After a barrage of strikes on Iran over this weekend, which was followed by retaliatory strikes by Iran targeting U.S. bases in the gulf, U.S. forces commenced a second round of attacks. However, Iran showed no let-up.
While Iran stated that it attacked bases in Kuwait and the United Arab Emirates, Al Jazeera reported citing a U.S. official that no bases in the gulf were hit by Iran including Kuwait.
Amid this re-escalation, the Strait of Hormuz remains closed.
Yesterday, Trump suggested renaming the Hormuz Strait as Trump Strait indicating that the U.S. holds control over the Hormuz region.
Only six commodity vessels transited the Strait of Hormuz on Wednesday, according to the preliminary shipping data from Kpler, indicating a drop down from 11-a-day earlier.