Gold Prices Dip on Profit-Taking Despite Rate Cut Expectations
Gold prices edged lower on Monday as investors moved to lock in profits following a strong rally in the previous session, which had been fueled by weaker-than-expected U.S. jobs data. The soft labor market figures boosted expectations that the Federal Reserve may cut interest rates as soon as September.
As of 00:55 GMT, spot gold was down by 0.3% to $3,351.80 per ounce, after jumping more than 2% on Friday—marking its strongest daily gain in weeks.
Meanwhile, U.S. gold futures rose 0.2% to $3,404.80 per ounce. The U.S. dollar index fell 0.5% against a basket of major currencies, making gold more attractive to holders of other currencies.
Weak Jobs Data Fuels Policy Shift Hopes
The latest U.S. employment report revealed slower job growth in July, along with a downward revision of 258,000 jobs for May and June combined. These figures signaled a potential cooling in the labor market and revived hopes of monetary easing, with markets now pricing in a 90% chance of a Fed rate cut in September, according to the CME FedWatch tool.
Gold’s Appeal in a Lower Interest Rate Environment
Gold is traditionally viewed as a safe-haven asset during times of economic and political uncertainty. It tends to perform well in low interest rate environments, as lower rates reduce the opportunity cost of holding non-yielding assets like gold.
Broader Precious Metals Market Trends
The rest of the precious metals complex also saw declines:
- Silver fell 0.5% to $36.83 per ounce.
- Platinum dropped 0.6% to $1,307.25 per ounce.
- Palladium declined 1.6% to $1,189.27 per ounce, marking the sharpest loss among the group.
