Gold Surges on Weak US Data but Momentum Fades

Hello everyone,

Last night, spot gold on the international market saw a sharp rally of several dozen dollars per ounce after the US released a series of economic reports that came in weaker than expected — particularly labour market data, which strengthened expectations that the Fed may accelerate its rate-cutting path. This is generally positive for gold, as lower interest rates reduce the opportunity cost of holding non-yielding assets.

However, shortly after the breakout, the market witnessed a large wave of profit-taking from institutional investors, causing gold to reverse and drop sharply.

The downside pressure did not come solely from profit-taking; it was also reinforced by a US economic backdrop showing mixed and increasingly unstable signals: weak employment data, slowing growth prospects, and rising expectations of imminent Fed rate cuts. These factors have left capital flows uncertain — torn between holding gold for safety or shifting toward risk assets as US equities recover slightly.

From my perspective, gold is now standing at a critical crossroads:

• Weak US data could support another upward leg.
  
  
• A dovish Fed remains a strong underlying foundation.
  
  
• But persistent profit-taking may prolong the short-term correction.
  

Gold’s next move will depend heavily on upcoming US economic releases this week and how the market reacts to shifting expectations around the Fed’s monetary policy.

Wishing everyone a clear-headed and successful trading day ahead!