Gold prices dropped 1% on Thursday as investors took profits and the US dollar strengthened ahead of a key jobs report. Spot gold fell to $2,853.83 per ounce, hitting an all-time high just two days ago at $2,882.16.
The stronger dollar is attributed to rising unemployment rates, which are forecast to remain unchanged at 4.1%. The labor market’s resilience has fueled economic growth and led the Federal Reserve to halt interest rate cuts. This has led investors to reassess their gold holdings, causing prices to slide.
Analysts point to inflation concerns as a key factor driving gold’s price movement. “Gold is responding as a safe haven,” said Alex Ebkarian, chief operating officer at Allegiance Gold. Despite short-term gains in the dollar, sentiment for gold remains strong, with many predicting prices will reach $2,900 soon.
Technical indicators suggest that gold is overbought, with its Relative Strength Index (RSI) above 70. The Bank of England’s gold reserves have also seen a decline, with Deputy Governor Dave Ramsden citing international price differentials as the reason for the drop.
Source: https://www.cnbc.com/2025/02/06/gold-holds-near-record-peak-as-trade-jitters-boost-safe-haven-demand.html