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Wednesday, September 02, 2026
What’s happening: Gold traded lower this morning amid higher US Treasury yields.
What happened: The yellow metal hit over two-week lows after dipping more than 2% in the previous session.
Strength in the US dollar also weighed on gold, while investors awaited the US ADP employment data and NFP (nonfarm payrolls) report this week.
Why it matters: US Treasury yields surged to their highest levels since January 2025 on Tuesday as rising tensions with Iran raised inflation concerns. Although gold is viewed as a hedge against inflation, higher interest rates generally weigh on the yellow metal by raising the opportunity cost of holding the non-yielding bullion.
The US launched airstrikes against Iran on Tuesday, which prompted a retaliation by Tehran, sending global energy prices higher.
Federal Reserve Governor Michael Barr also warned that the central bank will have to raise rates in case inflation does not ease quickly.
Fed Chief Kevin Warsh said at the Jackson Hole economic symposium on Friday that the central bank remains committed to its inflation target of 2%. Although Warsh did not mention any plans to raise interest rates, his comments were widely considered as hawkish, sparking increased speculations of the US central bank hiking rates this month.
Meanwhile, data released on Tuesday showed job openings in the US rose by 89,000 to 7.271 million in July, below market estimates of 7.30 million.
Strength in the US dollar also weighed on gold prices as a higher greenback makes metals more expensive for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained more than 0.1% to 99.79 this morning.
Spot price for gold dipped 0.8% to $4,292.78 an ounce this morning, after falling more than 2% in the previous session.
In other metals trading, spot price for silver declined 0.9% to $63.5160 an ounce, platinum fell 1.3% to $1,721.23 and palladium fell 1.4% to trade at $1,292.55.
What to watch: Investors will continue monitoring developments between the US and Iran.
Data on ADP employment (1615 UAE Time) will be released today which would offer some insights into the Fed rate expectations, while the NFP report is due Friday. Private businesses in the US, which added 44,000 jobs in July versus 95,000 in the previous month, are expected to add 48,000 jobs in August.
Nonfarm payrolls in the US, which declined by 23,000 in July, are expected to rise by 45,000 in August, while the unemployment rate is expected to rise to 4.2% from 4.1%.
Context: The NZD/USD forex pair fell this morning following the Reserve Bank of New Zealand’s interest rate decision.
Details: The New Zealand dollar declined to its weakest level in around three weeks, despite the Reserve Bank of New Zealand hiking its benchmark interest rates for the second consecutive meeting.
The RBNZ raised the OCR by 25 bps to 2.75% at the latest meeting, in-line with expectations, ramping up its efforts to contain inflation. The central bank had raised the cash rate in July, with inflation accelerating above its target range of 1%-3%. Annual inflation accelerated to 4.1% in the second quarter, mainly due to rising energy prices following the US-Iran conflict.
According to the central bank’s recent projections, rates could be increased one more time to 3% by the end of the year, with two more hikes likely by mid-2027.
Meanwhile, building consents for new dwellings fell 4.3% in July, compared to a 3.7% decline in June. This marked the fourth consecutive decline year-to-date.
Strength in the US dollar also weighed on the NZD/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, gained more than 0.1% to 99.79 this morning.
The NZD/USD forex pair fell around 0.6% to 0.5856 this morning, while the S&P/NZX 50 Index rose more than 0.2% to 13,821.66.
What to watch: Data on export prices (0245 UAE Time), import prices (0245 UAE Time) and terms of trade (0245 UAE Time) from New Zealand will be released on Thursday. New Zealand’s merchandise terms of trade, which declined 2.0% in the first quarter following a 3.7% gain in the previous quarter, is expected to fall 2.2% in the second quarter. Export prices in New Zealand fell 2.7% in the first quarter, while import prices slipped by 0.7% during the same period.
Other Markets: European indices closed lower on Tuesday, with the FTSE 100, DAX 40, CAC 40 and STOXX Europe 600 Index down by 0.32%, 1.10%, 0.39% and 0.56%, respectively.
Russia escalated attacks against Ukraine’s infrastructure, targeting the railway network. The news sent the USD/RUB pair higher in forex trading this morning.
Canada’s S&P Global manufacturing PMI fell to 53.0 in August from 53.5 in the previous month, which lent support to the USD/CAD forex pair.
The American Petroleum Institute reported that US crude oil inventories declined by 2.6 million barrels in the week ending August 28, after a gain of 4.2 million barrels in the previous week, which sent the WTI crude oil prices higher this morning.
India’s current account deficit widened to $4.2 billion in the first quarter of fiscal 2027, from $3.4 billion in the year-ago period, which lent support to the USD/INR forex pair.
Australia’s economy expanded by 0.4% in the second quarter, accelerating from 0.3% growth in the first quarter. However, the AUD/USD pair fell in forex trading this morning.
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