Gold retreats as investors lock in profits after Friday’s surge

SINGAPORE: Gold prices edged lower on Monday as investors took a breather, cashing in on gains after Friday’s sharp rally, which was fuelled by weaker-than-expected US job data that boosted hopes for a Federal Reserve rate cut in September.

By 0229 GMT, spot gold was down 0.3 percent at $3,354.17 per ounce, easing after jumping more than 2 percent in the previous session. In contrast, US gold futures nudged up 0.2 percent to $3,407.10.

Profit-taking and dollar stability pull gold back after strong rally

“Gold has started the week on a cautious note after Friday’s strong move,” said Tim Waterer, Chief Market Analyst at KCM Trade. “Some investors are taking profits while the US dollar shows signs of stabilising.”

Asian stock markets mirrored Wall Street’s decline as renewed concerns about the US economy drove expectations that the Fed could soon cut interest rates. The weaker dollar typically supports gold prices, but Monday’s mild rebound in the greenback limited gains for the metal.

US labour market figures released on Friday showed that nonfarm payrolls rose by just 73,000 in July, well below forecasts, after a downwardly revised increase of only 14,000 in June. The soft data reinforced market bets that the Fed will lower rates in September. According to the CME FedWatch tool, there is now an 81 percent chance of a cut.

Meanwhile, trade tensions remained in focus. US Trade Representative Jamieson Greer said in a televised interview on Sunday that tariffs introduced by President Donald Trump last week are likely to stay in place, adding further uncertainty to the global economic outlook.

Waterer added that with ongoing tariff tensions and rising expectations for a Fed rate cut, any dips in gold may not last long. “Pullbacks could be shallow, given the broader support for gold in a low-rate environment.”

Gold is often seen as a safe-haven investment during times of economic or political stress, and typically performs well when interest rates are falling.

In other precious metals, spot silver slipped 0.6 percent to $36.80 per ounce, platinum dropped 0.6 percent to $1,307.02, and palladium fell 0.9 percent to $1,197.76.

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