Gold prices steadied in Asian trade on Thursday, supported by rising bets on a September interest rate cut from the Federal Reserve, even as the dollar clawed back some ground.
Spot gold (XAU/USD) was trading at $3,397.19 an ounce by 09:30 GMT.
Prices came close to breaking back above $3,400 on Wednesday, but the move stalled as Treasury yields steadied and the dollar caught bids.
Still, heightened uncertainty over the Fed’s independence has been a key driver, after President Donald Trump attempted to fire Governor Lisa Cook. Both Cook and the Fed have challenged his authority to do so, with Cook signalling legal action to defend her post.
The standoff reinforced safe-haven demand and saw traders increase wagers on a September rate cut. Fed fund futures now price an 84.9% chance of a 25 basis point reduction, up from 78.4% last week, according to CME Fedwatch.
Chair Jerome Powell recently noted some cooling in the labour market but has stayed largely non-committal on easing, citing ongoing uncertainty over the inflationary impact of Trump’s policies. For now, the dollar’s pullback this week has given gold breathing room, even as commodity markets remain cautious ahead of fresh policy signals.