Gold prices fell below $2,650 per ounce on Monday, continuing a downward trend from recent record highs. This decline follows rorts of a strong U.S. labor market, which have diminished expectations for aggressive rate cuts by the Federal Reserve. In Stember, nonfarm payrolls surged by 254,000, greatly surpassing the anticipated 14,000 jobs, while the unemployment rate unexpectedly dropped to 4.1%. This robust data has alleviated fears of a weakening labor market, suggesting a limited scale of cuts in the current monetary cycle.
The reduction of interest rates typically lowers the opportunity cost of holding non-interest-bearing assets like gold. Market participants are now looking forward to the release of the latest Fed meeting minutes on Wednesday and the consumer price index rort on Thursday for further insights. At the same time, gold's role as a safe-haven asset remains supported by escalating tensions and violence in the Middle East.
Since the start of 2024, gold has seen an impressive increase of $580.51 or 28.14%, according to trading in contracts for difference (CFD) that track this commodity's benchmark market. Analysts predict that by the end of this quarter, gold could trade at approximately $2,679.92 per ounce, with estimates suggesting it may reach around $2,775.81 within the next 12 months.