**Gold Price Rises Past $2,350 on Waller’s Dovish Comments, Soft US Dollar**
*Adapted and expanded from original reporting by Jude Coleman, FXStreet.*
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The price of gold (XAU/USD) surged above $2,350 on Thursday in the wake of dovish comments from Federal Reserve Governor Christopher Waller and as the US Dollar weakened amid signs of slowing momentum in the US labor market. This significant upward move in the precious metal highlights gold’s dual role as a hedge against economic uncertainty and a beneficiary of anticipated shifts in US monetary policy.
## Key Developments Fueling Gold’s Rally
Several interconnected factors combined to fuel gold’s latest rally, ranging from crucial central bank commentary to macroeconomic data releases and broad market risk trends.
### 1. **Christopher Waller’s Comments Signal Dovish Shift**
Federal Reserve Governor Christopher Waller, a known centrist on the Federal Open Market Committee (FOMC), commented on the outlook for US monetary policy on Thursday. His statements included:
– Affirmation that there is progress toward the inflation target cited as necessary for interest rate cuts.
– Indications that if current inflation dynamics persist for several more months, then a cut could be “on the table.”
– A generally dovish interpretation on current economic conditions, emphasizing patience and a data-centric approach to future decisions.
Market participants interpreted Waller’s comments as signaling that the central bank is edging closer to easing policy. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making gold comparatively more attractive.
### 2. **US Dollar Weakness Adds Tailwinds**
Gold is typically priced in US Dollars, so moves in the Dollar Index (DXY) strongly influence bullion’s short-term trajectory. The DXY fell in response to:
– The prevailing dovish rhetoric from Fed officials.
– Recent softer-than-expected US economic data.
– Market positioning ahead of Friday’s release of the Nonfarm Payrolls (NFP) report, which is closely watched for policy signals.
A weaker US Dollar makes gold less expensive for holders of other currencies, thereby boosting international demand and supporting prices.
### 3. **US Labor Market Data Shows Signs of Cooling**
Several labor market indicators released this week suggest the US employment situation, while robust, is losing some momentum:
– The ADP National Employment Report showed private sector job creation lagging expectations in June.
– Continuing jobless claims edged higher, hinting at a modest uptick in layoffs.
– JOLTS (Job Openings and Labor Turnover Survey) data showed openings near a three-year low, suggesting a softening in job demand.
These factors may bolster the market’s case for an earlier start to interest rate cuts, bolstering gold’s appeal.
## Global Economic Backdrop and Market Sentiment
### Risk-Averse Market Environment
Growing concerns over slower global growth, geopolitical tensions, and shifts in central bank policies have left investors searching for safe havens. This environment further underpins gold’s attractiveness:
– Rising tensions between the US and China.
– Continued conflict in Ukraine and the Middle East.
– Disappointing manufacturing activity in key economies, such as the US, Europe, and China.
### Central Bank Gold Buying
Major central banks, including those in China, India, and Russia, have continued to accumulate gold reserves. Reasons include:
– Diversifying away from US Dollar holdings.
– Hedging against currency and geopolitical risk.
– Strengthening balance sheets amid global uncertainty.
This underlying demand places a long-term structural floor under gold prices.
## Technical Outlook: Gold Bulls Take Charge
Gold’s technical picture has strengthened considerably in recent sessions, with the $2,350 mark cleared during Thursday’s US trading hours. Several technical observations are noteworthy:
– **Breakout above resistance**: The rally past the previous range highs suggests buyers are regaining control.
– **Momentum indicators**: Daily RSI readings have moved towards overbought territory,
Read more on GBP/USD trading.