FX.co ★ Gold Stabilizes as Markets Reassess Fed Rate Outlook

Gold steadied around $4,330 an ounce on Wednesday after a recent selloff drove prices to their lowest level in more than three weeks, as investors reassessed the Federal Reserve’s interest rate outlook in the wake of a pause in the oil rally and weaker-than-expected US labor data. US private employers added 38,000 jobs in August, the smallest increase since January and below forecasts of 47,000, signaling a broader cooling in the labor market. According to the CME FedWatch Tool, markets now assign a 62% probability to a Fed rate hike in September, down from 68% before the ADP report but still notably higher than about 40% a week earlier. Gold remained under pressure as the US dollar hovered near a two-week high, supported by safe-haven flows amid concerns over the economic fallout from the energy shock and growing divergence in global monetary policy paths. Geopolitical tensions also intensified after the US said it had carried out overnight airstrikes on targets in Iran, prompting retaliatory action from Tehran in the most serious escalation between the two countries in weeks.