Gold prices experienced a decline in Asian trading on Friday, stepping back from recent record highs in anticipation of crucial U.S. labor data that is expected to influence the interest rate outlook.
A significant technical indicator for spot gold prices indicated a waning buying momentum following a robust surge in March and early April.
However, the yellow metal might find support from heightened safe-haven demand, particularly amidst escalating geopolitical tensions in the Middle East amid escalating tensions between Iran and Israel.
Spot gold saw a 0.6% decrease, reaching $2,277.10 per ounce after achieving a record peak of $2,305.31 on Thursday. Similarly, gold futures expiring in June experienced a 0.6% drop to $2,295.50 per ounce by 00:03 ET (04:03 GMT) after reaching a record high of $2,325.30 an ounce on Thursday.
A rebound in the dollar also contributed to the downward pressure on gold, as the greenback rose following a series of hawkish remarks from Federal Reserve officials.
Gold’s 14-week relative strength index (RSI), which measures buying and selling momentum for the precious metal, indicated that spot prices were well within the overbought territory. The RSI peaked at 82 earlier in the week and currently stood at approximately 74.9, suggesting that gold remained overbought despite Friday’s price declines. An RSI reading above 70 denotes that an asset is overbought.
Previously, gold had shrugged off the dollar’s recent strength and hawkish warnings regarding U.S. interest rates, benefiting from increased safe-haven demand amidst Middle East tensions. However, traders now seemed to be capitalizing on profits ahead of the release of key nonfarm payrolls data later in the day. Additionally, U.S. consumer price index inflation data is scheduled for release next week.
Other precious metals also experienced a retreat, with platinum futures down 1.1% at $935.60 per ounce, and silver futures falling 2.2% to $26.648 per ounce.
In the realm of industrial metals, copper prices witnessed some profit-taking on Friday after reaching 15-month highs earlier in the week. The surge in the red metal was fueled by positive economic indicators from top importer China, as well as expectations of tighter supplies in the upcoming months.
Three-month copper futures on the London Metal Exchange saw a 1.3% decline to $9,261 per ton, while one-month U.S. copper futures experienced a 0.8% drop to $4.1892 per pound. Both contracts remained in close proximity to the 15-month peaks reached on Thursday.
Market participants are now awaiting inflation and trade data from China, slated for release next week, for further economic cues concerning the world’s largest copper importer.
