May 05, 2024 (MENAFN via COMTEX) --
(MENAFN) Last week witnessed a downturn in gold prices, following a recent upward trend that saw the precious metal nearing its lowest point in a month. Despite disappointing data regarding US job growth, gold experienced a decline as investors opted to capitalize on profits amidst diminishing geopolitical tensions.
In terms of price movements, spot transactions indicated a 1.55 percent decrease in gold prices, settling at USD2,301.74 per ounce for the week. This marks a consecutive week of decline for gold. Notably, the metal swiftly surrendered its gains after briefly reaching its peak at USD2,320.78 immediately following the release of US non-farm jobs data. The figures revealed an increase of 175,000 jobs, falling short of economists' expectations of 243,000 jobs.
Gold, typically viewed as a safe haven during times of uncertainty, has experienced a 5.7 percent decline, equivalent to approximately USD140, since hitting a record high of USD2,431.29 in April. This decline has been attributed to easing geopolitical tensions in the Middle East and increased purchases by central banks.
Christopher Wong, a currency strategist at OCBC, attributed the significant decline in gold prices over the past fortnight to waning concerns surrounding geopolitical risks. Efforts led by Egypt to broker negotiations between Israel and Hamas have sparked optimism regarding the potential for a ceasefire agreement in Gaza.
Additionally, the US Federal Reserve signaled its inclination towards eventual interest rate cuts, although recent disappointing inflation readings may delay such actions. While the central bank remains open to reducing borrowing costs in the future, the indication of postponed interest cuts has influenced market sentiments and contributed to fluctuations in gold prices.
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