Gold Retreats After Record High Amid Profit-Taking and Dollar Stability

Gold prices declined in both local and global markets on Thursday, after spot gold touched a new all-time high earlier in the week, buoyed by growing expectations of a Federal Reserve rate cut and ongoing uncertainty over U.S. tariffs, according to a report from iSagha.

Saeed Embabi, CEO of iSagha, an online platform for gold and jewelry trading, said local prices fell by about EGP 30 compared to Wednesday’s close, with 21-carat gold dropping to EGP 4,815 per gram. Globally, spot gold slipped by about $21 to settle at $3,543 per ounce.

Embabi added that:

24-carat gold recorded EGP 5,503.

18-carat gold stood at EGP 4,127.

14-carat gold was priced at EGP 3,210.

Meanwhile, the gold pound coin rose to EGP 38,520.

On Wednesday, prices had risen sharply: 21-carat gold opened at EGP 4,800, hit EGP 4,860, and closed at EGP 4,845. Internationally, spot gold added $27, opening at $3,537, touching $3,579—its highest level ever—and closing at $3,564.

At its peak of $3,579 per ounce, the metal benefited from investors offloading long-term government bonds worldwide. Gold continues to hold above $3,500, supported by weakening labor market data and slower-than-expected private-sector hiring.

U.S. Labor Data: Fresh Support for Safe Haven Assets

Gold’s volatility was further shaped by economic data. Private payroll processor ADP reported that the U.S. economy shed 54,000 jobs in August, compared to expectations of a 73,000-job gain.

Nela Richardson, ADP’s chief economist, commented: “The year started with strong job growth, but momentum has weakened amid uncertainty. Factors such as labor shortages, fragile consumer confidence, and disruptions linked to artificial intelligence have all played a role.”

These disappointing figures reinforced expectations of a rate cut at the Federal Reserve’s mid-September meeting, helping gold remain resilient above $3,500 despite short-term corrections.

Bonds and the Dollar: Balancing the Equation

U.S. bond markets provided crucial support. Treasury yields eased slightly:

10-year yield fell to 4.19%.

30-year yield dropped to 4.87%.

10-year TIPS yield declined to 1.79%.

Lower yields reduced the opportunity cost of holding gold, particularly as the U.S. dollar index steadied above 98.00, recovering part of its earlier losses.

Globally, bond markets in Japan and the UK showed signs of stabilization after surging to multi-decade highs, helped by strong auctions and political reassurances. Still, concerns over global debt sustainability continue to bolster gold’s safe-haven appeal.

U.S. Trade Policy Uncertainty

Trade policy uncertainty has also grown amid legal challenges to U.S. tariffs. The Trump administration petitioned the Supreme Court to overturn a lower court ruling that limited presidential authority to impose tariffs. Until a final ruling is issued, tariffs remain in place—keeping Trump’s broader economic agenda under legal scrutiny and adding another layer of uncertainty for markets.

Fed Policy Outlook

These dynamics put extra weight on the upcoming Federal Reserve meeting on September 16–17. According to the CME FedWatch Tool, markets are pricing in a 97% probability of a 25-basis-point cut.

Fed officials struck a cautious tone:

Christopher Waller explicitly called for immediate cuts, with scope for further easing within six months.

Raphael Bostic, Atlanta Fed President, said a modest 25-bp cut would be appropriate.

Alberto Musalem, St. Louis Fed President, argued policy was “currently in the right place,” but acknowledged further labor market weakness could justify a shift.

Institutional Outlook: Eyeing $5,000

Investment banks remain bullish. In a recent note, Goldman Sachs reaffirmed gold as its “top long-term recommendation,” projecting prices at $3,700 by end-2025 and $4,000 by mid-2026, driven by central bank demand.

A more dramatic scenario envisions private investors shifting even 1% of capital out of U.S. Treasuries into gold, which could push prices close to $5,000 per ounce, especially if Fed independence comes under further political pressure.

Eyes on Nonfarm Payrolls

Markets now await Friday’s nonfarm payrolls (NFP) report—one of the most influential indicators shaping Fed policy. Any downside surprise could strengthen gold’s recent momentum and potentially prompt another test of record highs.

Conclusion

Gold stands at a crossroads, caught between opposing forces. On one side, dovish Fed expectations, weak labor market signals, and geopolitical uncertainty underpin its rally. On the other, a stronger dollar and profit-taking exert short-term pressure.

While the all-time high of $3,579 per ounce underscores the strength of the uptrend, the near-term trajectory will hinge on upcoming U.S. economic data and the Fed’s policy path—with an increasing number of analysts betting that gold’s next milestone could be $5,000 per ounce.