Global gold prices fluctuated around the $2,300 per ounce mark on Friday, supported by weaker-than-expected jobs data, while facing pressure from investors’ profit-taking as geopolitical tensions eased.
At the close of trading, spot gold on the New York market fell $2.1 per ounce, or nearly 0.1%, to settle at $2,302.2 per ounce, according to data from Kitco News. During the session, gold prices fell to $2,276 per ounce, the lowest since early April.
The US Labor Department reported that the non-farm sector of the economy added 175,000 new jobs in April, far fewer than the forecast of 240,000 new jobs in a Dow Jones poll of economists. The unemployment rate ticked up to 3.9% from 3.8% in the previous month. Wage data also came in weaker than expected, indicating a potential easing of inflationary pressures.
Following the release of the jobs report, traders increased their bets on the likelihood of the Fed raising interest rates twice this year instead of just once as previously expected. The interest rate futures market reflected a nearly 50% chance of a 0.25 percentage point cut by the Fed in September, according to the CME’s FedWatch Tool.
Immediately after the weaker-than-expected jobs data, gold prices surged to nearly $2,321 per ounce. However, at this level, profit-taking ensued, causing gold prices to quickly retreat.
“The gold rally after the jobs report triggered significant profit-taking. This suggests that gold speculators are becoming more cautious after gold’s strong gains in April and following the Fed chair’s relatively dovish remarks on Wednesday,” said Tai Wong, an independent precious metals trader in New York, to Reuters.
Lower US Treasury yields and a weaker dollar also provided support for gold prices. The yield on the 10-year US Treasury note fell below 4.5%. The Dollar Index, which measures the greenback against a basket of six major currencies, ended the session at approximately 105.1 points, compared to over 106 points at the start of the week.
For the week, the Dollar Index fell more than 0.8%, while gold prices declined 1.8%, marking the second consecutive weekly drop.
The rise in US stock markets this week has dampened the appeal of gold. Investors shifted capital to riskier assets such as stocks, instead of flocking to gold as they had been doing recently. Chris Gaffney, President of Everbank World Markets, commented that the risk-on sentiment translates to diminished demand for gold.
Another important factor contributing to gold’s decline this week was the continued easing of geopolitical tensions in the Middle East. Regarding the conflict in Gaza, Israel and Hamas are considering a temporary ceasefire and are engaging in negotiations with international mediators.
Gold prices have fallen about $140 per ounce, or 5.7%, from their record high of over $2,430 per ounce on April 12, driven by the heat of the Middle East conflict and central banks’ net gold purchases.
“There is a concern that gold prices could fall further if demand from Asia fails to pick up. Gold could slide to $2,150 per ounce in the short term without significantly impacting its long-term bullish outlook,” Wong added.
On Friday afternoon, the domestic gold bar price reached a record high of VND 85.8 million per tael, an increase of VND 600,000-800,000 per tael compared to the morning session.
The gold auction that the State Bank planned to hold yesterday morning was canceled due to the presence of only one bidder. Thus, three out of the four recent gold bar auctions were canceled due to a lack of participants.
The week-ending spot gold price in the international market is equivalent to about VND 70.6 million per tael when converted at Vietcombank’s selling exchange rate. Compared to the converted world gold price, the domestic gold bar price is VND 15 million per tael higher.
This morning, domestic gold prices remained at nearly VND 86 million per tael for gold bars and VND 75.2-75.3 million per tael for gold rings.
Phu Quy Group listed the SJC gold bar price in Hanoi at VND 83.5 million per tael (buying) and VND 85.8 million per tael (selling), unchanged from yesterday’s close but up VND 500,000 per tael and VND 800,000 per tael, respectively, from yesterday’s morning session.
Phu Quy’s 999.9 fine gold rings were priced at VND 73.7 million per tael and VND 75.3 million per tael, unchanged from yesterday’s close but down VND 150,000 per tael on both buying and selling prices compared to yesterday morning.
Bao Tin Minh Chau Jewelry Company quoted the price of Rồng Thăng Long 999.9 gold rings at VND 73.62 million per tael and VND 75.22 million per tael.
In Ho Chi Minh City, SJC Company quoted gold bar prices at VND 83.5 million per tael and VND 85.9 million per tael. SJC gold rings were priced at VND 73.1 million per tael for buyers and VND 74.8-74.9 million per tael for sellers, depending on weight.
The world’s largest gold ETF, SPDR Gold Trust, bought a net 0.9 tons of gold in Friday’s session, increasing its holdings to 830.5 tons. This week, the fund sold a net 1.7 tons of gold.
