Gold extended its rebound during Wednesday's Asian deals, climbing back above the US$4,200 level as investors positioned for pivotal U.S. economic data later in the session.
Spot gold was up 0.4% at US$4,224.12 per ounce by 3:45 pm AEDT (4:45 am GMT), with buyers eyeing a retest of the $4,250 level.
A weaker U.S. dollar and softer Treasury yields continued to offer support, reflecting rising expectations that the U.S. Federal Reserve could deliver an interest rate cut next week.
Sentiment was also influenced by speculation that White House Economic Adviser Kevin Hassett has emerged as President Donald Trump’s preferred candidate to become the next Fed Chair, adding an additional layer of uncertainty to the policy outlook.
Gold also benefited from renewed geopolitical tensions as Russia and the United States failed to find common ground on a potential Ukraine peace deal.
Following a five-hour meeting in Moscow, the Kremlin confirmed that significant differences remain. President Vladimir Putin’s top foreign policy aide, Yuri Ushakov noted that talks in the Russian capital were “very useful, constructive, and highly substantive,” but a “compromise option was not found”.
Stronger-than-expected Chinese services sector data added further momentum. The RatingDog China General Services PMI, compiled by S&P Global, slipped to 52.1 in November from 52.6 but remained firmly in expansion territory. The reading also exceeded forecasts for a drop to 52.
Traders now turn to the upcoming US ADP employment change report and the ISM services PMI for further cues.
Stronger-than-expected results could temper bets on near-term Fed easing, while softer numbers may reinforce the dovish momentum that has buoyed gold through the week.
