XAU/USD slips after four-session rally as softer US jobs data reduces expectations for aggressive Fed tightening.
Gold prices pulled back from a seven-week high near $4,300 during Thursday’s Asian session, reversing some of the previous day’s 4% surge. The retreat followed softer US economic data, which dampened expectations for further Federal Reserve rate hikes.
Private-sector employment in the US rose by just 40K in July, down sharply from 95K in June and below consensus estimates. The ISM Services PMI also missed forecasts, rising only slightly to 54.1. These figures reduced the probability of a September Fed rate hike to 55%, down from 67%.
Lower Treasury yields and a weaker USD supported gold earlier in the week, driven by hopes of a US-Iran peace deal easing inflation pressures. However, Fed officials have warned of persistent inflation risks, capping further gains.