Gold Prices Decline as Profit-Taking Follows Strong Gains
Gold prices experienced a slight decline during trading on Monday, August 4, amid profit-taking after the sharp rise recorded by the yellow metal in the previous session, supported by disappointing U.S. economic indicators, which bolstered speculation that the Federal Reserve would soon cut interest rates.
According to the data, the spot gold price fell by 0.1% to settle at $3359.87 per ounce, following a rise of more than 2% last Friday. Meanwhile, U.S. gold futures rose by about 0.3% to reach $3411.90 per ounce.
The decline of the dollar index by 0.5% against a basket of major currencies enhanced the attractiveness of gold as an investment alternative for holders of other currencies, especially with increasing expectations that the U.S. Federal Reserve would begin to ease its monetary policies.
U.S. labor market data for July showed growth below expectations, along with a downward revision of previous May and June data, as the number of jobs added was reduced by about 258,000 jobs, indicating a clear slowdown in the labor market.
In this context, the "FedWatch" tool from the "CME Group" indicated a 90% probability that the U.S. Federal Reserve would cut interest rates in September, which enhances demand for gold as a safe asset in an environment of declining returns on other financial instruments.
In a related context, other precious metals also saw a decline in their values, with silver dropping by 0.5% to $36.83 per ounce, platinum falling by 0.6% to $1307.25, while palladium decreased by 1.6% to record $1189.27 per ounce.
