In Asian trading on Friday, gold prices took a dip from recent record highs in anticipation of key U.S. labor data that could influence interest rate expectations. The decline was supported by a technical indicator suggesting a slowdown in buying momentum following a strong upward trend in March and early April.
Despite this retreat, gold may find support from heightened safe-haven demand amid escalating tensions in the Middle East, particularly between Iran and Israel. Spot gold dropped by 0.6% to $2,277.10 per ounce after reaching a peak of $2,305.31 on Thursday. Gold futures expiring in June also fell by 0.6% to $2,295.50 an ounce after hitting a record high of $2,325.30.
The strengthening dollar, fueled by hawkish statements from Federal Reserve officials, further pressured gold prices. The Relative Strength Index (RSI) for gold, a measure of buying and selling momentum, indicated that gold was overbought, with the RSI hovering around 74.9, well within overbought territory. An RSI reading above 70 suggests an asset is overbought.
Investors seemed to be cashing in on profits ahead of the release of key nonfarm payrolls data, as well as U.S. consumer price index inflation data scheduled for the following week. In the broader metals market, platinum futures dropped by 1.1% to $935.60 an ounce, while silver futures declined by 2.2% to $26.648 an ounce.
Copper prices also saw some profit-taking after reaching 15-month highs earlier in the week, driven by positive economic indicators from China and expectations of tighter supplies ahead.
Three-month copper futures on the London Metal Exchange fell by 1.3% to $9,261 a ton, while one-month U.S. copper futures decreased by 0.8% to $4.1892 a pound, remaining close to their recent peaks.
Market participants are now awaiting inflation and trade data from China next week for further insights into the economic outlook for the world's largest copper importer.
Paraphrasing text from "Investing" all rights reserved by the original author.
