Gold Price News: Gold Rally Runs Out of Steam On Profit Taking

Gold prices fell on Friday, as a strong rally earlier in the day went into reverse later in the session.

Gold looked set to close out the week in what was a decidedly bullish few days for the precious metal, but several days of gains appeared to trigger some profit taking ahead of the weekend.

Prices rose as high as $2,486 an ounce on Friday, a fresh all-time high, compared with around $2,446 an ounce in late trades on Thursday. Prices had been as low as $2,370 an ounce at the start of the week.

However, prices abruptly changed course part way through the afternoon session on Friday, dropping as low as $2,412 an ounce.

The earlier strength for gold followed the release of the closely-watched US non-farm payrolls figures for July, which showed only 114,000 jobs were added, against market expectations of 175,000. Separate unemployment figures also painted a similar picture, showing that 4.3% of the population were out of work in July, a fourth consecutive monthly rise, and above market expectations of 4.1%.

Adding further fuel to the bleak picture, new orders for US manufactured goods fell by 3.3% in June, more than the market’s expected decline of 2.9%.

The latest macro figures were a supportive factor for gold as a safe haven investment and sent the US dollar crashing to a two-week low against the Euro.

However, gold’s earlier gains were unable to hold, and this may have reflected profit-taking going into the weekend, but also that the markets are fully expecting interest rate cuts by the US Fed in September, and further signs of weakness in the economy only confirm what the market already expects on monetary policy in the coming months.

The markets will be looking ahead to Monday’s US ISM services PMI data for July, particularly as the June reading showed its sharpest contraction since April 2020.