Spot Gold pulled back from an all-time high of $3,578.50/oz. on Thursday on likely profit taking after recent rally.
The yellow metal has been underpinned by rising expectations of a Federal Reserve interest rate cut this month and heightened safe-haven demand.
“We’ve seen a bit of profit-taking, but gold is still in a bull market at this point in time. Rate-cut expectations and worries over the Federal Reserve’s independence are going to add to safe-haven demand,” GoldSilver Central’s Brian Lan was quoted as saying by Reuters.
“We won’t be surprised even if gold prices go up to $3,800 or even higher in the near-term.”
Markets are now pricing in about a 97% chance of a 25 basis point Fed rate cut in September.
Lower interest rates tend to reduce the opportunity cost of holding Gold, which pays no interest.
This week’s US Non-Farm Payrolls report could provide more clues on the size of the expected rate cut by the Fed.
Employers in all sectors of the US economy, excluding farming, probably added 78,000 job positions in August, according to market consensus, following a job growth of 73,000 in July.
The latest data by the US Labor Department showed job openings had dropped more than expected to 7.181 million in July, suggesting a cooling labor market.
Spot Gold was last down 0.56% on the day to trade at $3,539.17 per troy ounce.
Strong central bank buying, US tariff policies, potential rate cuts by the Federal Reserve and geopolitical uncertainty have fueled Gold’s rally to a series of record highs this year. Year-to-date, the yellow metal has surged 34.86%.
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