Gold inter-markets: the ongoing recovery driven by easing worries of Fed rate-hike action

Gold traded higher for third consecutive session and has held on to its recovery gains to currently trade around $1326 level, just below $1330 level touched in the aftermath of dismal US monthly jobs report for August. 

The lower-than-expected release of headline NFP print seems to have diminished possibilities of an eventual Fed rate-hike action at its meeting on September 20-21 and helped the precious metal to stage a goodish recovery from over 2-month low touched earlier on Friday. The prospect of lower interest-rates for longer-than-expected period could weigh on the greenback and boost demand for dollar-denominate commodities, including gold. 

Hence, Monday's recovery was supported by a mildly weaker greenback, as measured by the overall US Dollar Index and as depicted by a slide in the USD/JPY pair. However, flattering of the US longer-term (30-years) Treasury bond yields and suppressed level in the Volatility Index (VIX) has not been supportive of the ongoing up-move in the yellow metal. Continuous slide in the VIX is reflective of increasing investor appetite for riskier assets - like equities, which has been the key factor driving the broader US equity index (S&P500) higher and is denting the safe-haven appeal of the precious metal. 

Going forward, this week's lighter US economic calendar is unlikely to provide any fresh impetus and the yellow metal is likely to take cues from the prevalent sentiment surrounding the greenback and riskier asset class - like equities.