Gold Price News: Gold Levels Off After Sharp Gains

Gold prices stabilised on Thursday, holding onto Wednesday’s significant gains.

Prices held within a narrow range of $2,354 to $2,363 an ounce on Thursday, compared with Wednesday’s rally from as low as $2,328 an ounce.

Thursday’s trading activity was characterised by calm after Wednesday’s hefty gains, which came after the US ISM Services PMI reading fell to 48.8 in June, well below market expectations of 52.5. This was the lowest monthly drop for the index since April 2020. The unexpected weakness in the services sector helped to build a stronger case for interest rate cuts – a bullish factor for non-yield-bearing assets like gold.

The gains on Wednesday, and subsequent stabilisation, have helped solidify the perception of support for gold at around $2,300 an ounce, which has in recent months been an area where strong buying took place.

On the financial side, open interest in gold futures eased slightly in the week ending June 28, with Comex dropping to $104.9 billion from $105.1 billion the previous week, while open interest on the Shanghai Futures Exchange fell to $26.7 billion from $31.1 billion the previous week, according to data from the World Gold Council: Gold Open Interest Chart 2021 | World Gold Council

Looking ahead, attention will turn to Friday’s US Non-Farm Payrolls figures and the unemployment rate, both for June, for further signals on the strength of the US economy as the markets assess the prospects of interest rate cuts in the autumn.