Gold prices fell sharply after the US released positive data on the labor market, increasing expectations that the US Federal Reserve (Fed) could raise interest rates.
The world gold market is currently closed. Spot gold prices fell 0.96%, to 4,430.33 USD/ounce. Meanwhile, December gold futures fell 1.38%, to 4,477.20 USD/ounce.
In August, the number of non-farm jobs in the US increased by 162,000, after the data from the previous two months was adjusted upwards. This figure is higher than all forecasts by Bloomberg analysts. The unemployment rate remained at 4.1%.
Positive job data has caused traders to increase bets on the possibility of the Fed raising interest rates in September. The probability for this scenario is raised to about 60%, while previously the market had hardly bet on this possibility.
After the data was released, the USD appreciated, while the yield on US government bonds with a 2-year term also increased. This development put pressure on gold prices as USD-denominated assets became more attractive, while gold did not generate profits.
The sharp drop in gold occurred after the precious metal rose nearly 2% in the previous session. Statements by Fed officials, including Christopher Waller, earlier reinforced expectations that the Fed could keep interest rates unchanged if inflation continued to cool down.
On the precious metals market, spot silver prices fell 1.13%, to 66.2175 USD/ounce. Platinum prices fell slightly 0.03%, to 1,822.53 USD/ounce. Meanwhile, palladium prices fell 2.77%, to 1,400 USD/ounce.
Gold price outlook for next week is still differentiated. The survey shows that 38% of Wall Street analysts forecast gold prices to increase, 31% forecast to decrease and the remaining 31% believe that gold prices will move sideways but fluctuate strongly.
Among 220 individual investors participating in the online survey, 55% expect gold prices to increase next week, 24% forecast to decrease and 21% believe that the market will move sideways or the trend is not yet clearly defined.
In the short term, gold prices are forecast to continue to fluctuate strongly in the 4,320–4,670 USD/ounce range. The 4,280 USD/ounce mark is an important support level. If this range is broken, gold prices may fall back to 4,200 USD/ounce.
