Gold prices decline amid profit-taking in a volatile market

SadaNews - Gold prices have declined after two days of gains, as investors opted to take profits in a volatile market that is still trying to find a support level, following a historic sell-off.

Spot bullion fell by as much as 1.4% in early trade, before trimming losses to trade just above $5,000 an ounce. Traders are awaiting U.S. data due out this week for indications on the direction of policies from the Federal Reserve. Gold remains significantly up since the beginning of the year, despite a nearly 10% decline since reaching an all-time high on January 29.

Precious metals experienced a sharp decline at the end of January, after a record surge driven by intense speculation led to excessive market highs.

However, many factors that have supported the upward wave for years remain in place, including escalating geopolitical risks, increased purchases by central banks, and investors fleeing sovereign bonds and currencies.

Bank optimism and continued official demand

Asset managers and banks, including "Deutsche Bank" and "Goldman Sachs", still favor a recovery in gold driven by these long-term structural factors. In a sign of robust official demand, the People's Bank of China continued to buy gold for the fifteenth consecutive month in January.

Looking ahead, forthcoming economic data later this week is expected to provide additional indications on the path of the Federal Reserve's policy, after U.S. President Donald Trump nominated Kevin Warsh to head the central bank.

The January jobs report, due out on Wednesday, is expected to show signs of labor market stability, while inflation data will be released on Friday.

Gold declined in spot transactions by 0.7% to $5,024.74 an ounce by 11:47 AM in Singapore. Silver fell by 2% to $81.43, and prices for platinum and palladium also decreased.

The "Bloomberg" Spot Dollar Index, which measures the performance of the U.S. currency, declined by 0.1% after ending the previous session down by 0.6%.