Gold prices traded lower during Thursday’s Asian session, as investors balanced persistent geopolitical risks against renewed strength in the United States dollar and looked ahead to key U.S. labour market data for direction.
By 3:30 pm AEDT (4:30 am GMT), spot gold was down 1.6% at US$4,887.13 per ounce.
Market participants are turning focus toward the upcoming U.S. job opening and labour turnover survey (JOLTS) report, as well as ongoing geopolitical developments involving the United States and Iran.
The precious metal finished the previous session largely unchanged, while briefly testing the $5,100 level amid uncertainty surrounding the U.S. Federal Reserve’s potential policy path under Kevin Warsh.
Additional support for gold came from renewed geopolitical tensions in the Middle East and between Russia and Ukraine, which reinforced demand for traditional safe-haven assets.
Concerns about disruptions to economic data releases due to the recent partial U.S. government shutdown also added to uncertainty.
However, sentiment shifted during the U.S. trading session on Wednesday. The U.S. dollar strengthened after the release of the ISM services purchasing managers’ index (PMI), which pointed to firmer inflation pressures.
At the same time, an intensifying sell-off in technology stocks on Wall Street drove investors toward the U.S. dollar as a defensive asset.
The move was reinforced by weakness in the Japanese yen, which came under pressure amid fiscal and political concerns. The resulting rise in USD/JPY helped underpin broader dollar strength.
By Thursday, the greenback had extended its advance, reaching fresh two-week highs against a basket of major currencies as risk appetite deteriorated amid the global technology sector sell-off.
