Gold steadies near $4,330 as Fed-hike odds and dollar shift

Gold stabilized around $4,330 an ounce Wednesday after a recent selloff pushed bullion to its lowest level in more than three weeks, as investors reassessed the outlook for Federal Reserve interest rates following a pause in the oil rally and weaker-than-expected US labor data.

US private businesses added 38,000 jobs in August, the weakest increase since January and below expectations of 47,000, pointing to a broader cooling in the labor market.

Markets now price in a 66% chance of a September Fed hike, down slightly from 68% before the ADP report but still well above around 40% a week ago, according to the CME FedWatch Tool.

Gold remained under pressure as the dollar held near a two-week high, supported by safe-haven demand amid concerns over the economic impact of the energy shock and diverging monetary policy paths.

The US said it had launched overnight airstrikes on targets in Iran, prompting retaliation from Tehran in the most serious escalation between the two countries in weeks.