Gold Facing Second Consecutive Weekly Loss
Gold experienced its first back-to-back weekly decline since February, with a correction from the previous month’s surge. This downtrend came as investors opted to cash in on profits following a slight easing of tensions in the Middle East.
On Friday, gold relinquished its initial gains which had initially followed the release of data indicating a lower-than-expected increase of 175K jobs in the U.S. Non-Farm Payrolls. This resulted in a brightened outlook among investors, suggesting a possible slowdown in the economy. Consequently, interest in safe-haven assets like gold dwindled.
Market Reaction and Price Movements
“Gold’s initial rally in response to the Goldilocks employment report spurred profit-taking activity, indicating a more cautious stance among bulls after April’s remarkable climb and a tepid response post-Fed Chairman Jerome Powell’s positive remarks earlier in the week,” stated independent metals trader Tai Wong to Reuters.
By the end of the week, front-month Comex gold for May delivery closed flat on Friday yet marked a 1.5% decline for the week at $2,299.00 per ounce. Similarly, May silver ended the week down by 2.9% to $26.445 per ounce after a 0.5% drop on Friday.
Goldman Sachs Predictions on Gold’s Future
While gold retraced slightly from its record highs in April, Goldman Sachs analysts foresee a potential rebound to approximately $2,700 per ounce by year-end under normal conditions. The banking giant cites sustained demand from central banks and Asian consumers, with expectations of lower interest rates later in the year which could boost sentiment towards the non-interest-bearing metal.
Goldman also points out that global gold purchases have surged threefold since the Russia-Ukraine conflict, signaling the potential for further price increases in the face of new geopolitical or financial disruptions.