Gold backs off record highs ahead of US jobs data

Gold prices fell in European trade on Friday away from recent record highs amid active profit-taking, following controversial remarks by a Fed official.

Such remarks cast doubts on the chances of a US interest rate cut in June, as investors now await the crucial US payrolls report later today.

Nonetheless, gold prices are heading for the third weekly profit in a row on strong haven demand, amid mounting geopolitical tensions, while global central banks gradually head towards policy easing.

Gold Prices 

Gold prices fell 1% to $2267 an ounce, with a high at $2293.

Gold prices lost 0.4% on Thursday, the first loss in eight days away from a record high at $2305. 

Controversial Remarks 

Minneapolis Fed President Neil Kashkari said on Thursday that if inflation continued to move higher, it would put into question the possibility of any interest rate cuts this year. 

US Rates

Following the remarks, the odds of a US interest rate cut in June tumbled from 67% to 60%. 

However, investors continue to price in 75 basis points of expected Fed interest rate cuts this year.  

The Payrolls Report

Now investors await the all important US payrolls report later today, crucial for gauging the likely path ahead in US monetary policies. 

The US economy is expected to have added 212 thousand new jobs in March, with unemployment expected at 3.9%.  

Weekly Trades

Gold prices are still up 1.5% so far this week, on track for the third weekly profit in a row, amid strong demand from investment funds. 

Gold Performance Projections

JPMorgan's analysts foresee gold prices hitting $2500 an ounce this year.

Goldman Sachs' analysts project a minimum price target of $2300 an ounce for this year, anticipating policy easing by the Federal Reserve.

The SPDR

Gold holdings at the SPDR Gold Trust rallied 1.72 tonnes yesterday to a total of 832.45 tonnes, the highest since March 25.