Gold rises after sharp losses amid anticipation of U.S. employment data

Gold recorded a notable increase in trading on Wednesday, supported by selective buying from investors after it fell yesterday to its lowest level in about a week, as attention turns to U.S. private sector employment data in search of potential signals regarding the interest rate path.

The yellow metal rose in spot transactions by 1.04% to reach $3972.71 per ounce, after losing more than 1.5% during Tuesday's session, marking its lowest level since October 30. U.S. gold futures for December delivery also increased by 0.6% to $3985.20 per ounce.

Despite the dollar stabilizing near its highest levels in three months, which it recorded in the previous session, gold received support from increased demand for safe havens amid investors' aversion to risk, in addition to buying aimed at seizing opportunities.

In this context, Jigar Trivedi, senior currency analyst at Reliance Securities, told Reuters that "what we are seeing in gold right now is selective buying supported by a general caution in financial markets, which enhances demand for safe havens."

This movement coincided with the extension of losses in Asian stocks at the beginning of today's trading, affected by the wave of selling that Wall Street experienced overnight, amid rising fears of overvaluation in stocks.

Trivedi added that "gold is under pressure due to declining expectations for another rate cut this year, and it may see further decline towards the $3900 level if U.S. employment data comes in stronger than expected."

The U.S. Federal Reserve had cut interest rates last week, in a move described by its chairman Jerome Powell as potentially the last one this year.