Gold Price News: Gold Gives Up Gains to End Lower on Friday

Gold prices ended up slightly lower on Friday, reversing course after a bullish start, as the markets digested a mixed set of US economic data and looked ahead to Tuesday’s US Presidential election.

Prices rose as high as $2,764 an ounce on Friday, compared with around $2,747 an ounce in late trades on Thursday. However, the gains couldn’t hold, and prices fell back to as low as $2,735 an ounce by Friday evening.

Non-farm payrolls come in below expectations

US non-farm payrolls figures came out on Friday showing a paltry 12,000 jobs were added in October, far below market expectations of 113,000. While the figures may have initially helped the case for more aggressive interest rate cuts by the US Fed – a positive factor for gold prices – the market appeared to shrug off the latest figures, which were seemingly skewed by the effects of Hurricane Milton which hit Florida in early October.

Beyond that, US unemployment figures for October were released on Friday, which were in line with market expectations at 4.1%. US ISM manufacturing PMI figures also came out for October which showed a surprise fall to 46.5, compared with expectations of 47.6. Taken together, the latest data appeared to give gold little reason to push higher.

Goldman Sachs sees gold hitting $3,000 an ounce

In other news, US bank Goldman Sachs forecasts that gold prices will reach $3,000 an ounce by the end of 2025, according to a report it published on October 29.

The bank said the traditional relationship between gold and interest rates is still a major driver for gold prices, but that large central bank purchases of gold bars have ‘reset the relationship’ between rates and gold. In addition, this renewed interest in gold among central banks has been linked to the freezing of Russian assets following the country’s invasion of Ukraine in 2022, it said.

Market positioning

Investment flows into physically-backed gold ETFs were positive again in the week to October 25, following a very large inflow the previous week ending October 18. Asian markets saw inflows of 12.2 tonnes, while North America saw inflows of 4.5 tonnes, according to World Gold Council figures. Only Europe was on the sell-side with 1.9 tonnes of outflows, the figures showed.

Meanwhile, open interest in gold futures on the exchanges hit a record high in the week to October 25, according to World Gold Council data. Total open interest reached $194.4 billion, up slightly from $193.1 billion the previous week. The figure includes $155 billion on the US COMEX and $34.6 billion on the Shanghai Futures Exchange. In addition, COMEX net-long positioning increased for a third consecutive week in the week to October 22, rising to 918.1 tonnes, from 888.1 tonnes in the week to October 15, it said. That was still some way off a recent peak of 976.5 tonnes of net longs in the week to September 24.

Technical analysis

Gold’s price action on Friday shows that the precious metal has pulled back from the upper boundary of a rising trend channel going back to late July. This channel indicates upside resistance at around $2,820 an ounce and downside support at around $2,688 an ounce. The losses on Thursday and Friday also mean gold prices have narrowed their premium over the 20-day moving average, currently pegged at $2,701 an ounce. In addition, the 14-day Relative Strength Index pulled back to around 60 on Friday, compared with around 75 on October 30, which may have been taken as a signal that the market was overbought.

Upcoming data to watch out for

Monday will see the monthly HCOB manufacturing PMI data for Europe as well as US factory orders for September. Then on Tuesday there will be an update on the US ISM services PMI figures for October, for the latest reading on the health of the US economy.

But all data releases will be overshadowed by the US Presidential election on Tuesday – a factor which has maintained a degree of uncertainty for financial markets and precious metals for some time. 

Since uncertainty leads to a risk-off attitude toward conventional investments, it tends to support safe-havens like gold, so the US election could remove a somewhat supportive element for gold prices. That said, it will take time for the full economic impact to be known, whichever administration sits in the White House for the next four years. Other supportive factors, such as falling interest rates and heightened geopolitical risk, show no sign of abating for the time being.