Spot gold held at $2,443.44 per ounce as of 0335 GMT, after an earlier 1% drop.
US gold futures rose 0.7% to $2,485.80, according to news agency Reuters.
In India, 24-carat gold was priced at ₹69,730 per 10 grams, or ₹6,973 per gram.
The price of 22-carat gold stood at ₹63,919 per 10 grams.
Tim Waterer, Chief Market Analyst at KCM Trade, said, “Profit-taking is happening while traders gauge how aggressive the Fed might be with rate cuts.”
“The fundamental picture for gold hints at further gains given expectations for dovish US monetary policy,” he was quoted as saying in a Reuters report.
Economic indicators and expectations
US job growth data for July showed a slowdown, with the unemployment rate rising to 4.3%.
This unexpected weakness has fueled recession fears and increased the likelihood of a rate cut at the Federal Reserve’s September 17-18 meeting.
The CME FedWatch tool indicates a more than 70% probability of a 50 basis points rate cut, compared to an 11.5% chance a week ago, as per Reuters.
Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, boosting demand.
However, Richmond Federal Reserve President Thomas Barkin remains cautious about adjusting his monetary policy stance.
Investors await the release of the final July S&P Global services and ISM non-manufacturing PMI figures for more insights.
Rahul Kalantri, VP of Commodities at Mehta Equities, noted recent volatility in gold prices.
“Gold reached a lifetime high amid hopes for Fed rate cuts and disappointing US job data,” he said.
Kalantri explained that weaker US job reports and factory orders caused a dip in gold prices.
He highlighted gold’s support at $2,418-2,398 per ounce and resistance at $2,454-2,474 per ounce.
In Indian rupees, gold’s support lies at ₹69,150-68,880 per 10 grams, with resistance at ₹69,790-70,050 per 10 grams.
Should you buy gold now?
Investing in gold can be a strategic move during economic uncertainty.
Rate cut expectations, geopolitical tensions, and economic instability could support higher gold prices.
However, investors should remain cautious due to potential volatility and global economic influences on gold prices.
