Gold Retreats as Investors Lock in Profits

Gold prices retreated on Friday after reaching a two-month high due to profit-taking by investors. The non-yielding metal climbed to its highest point since June 5 before settling 1.3% lower and setting it on track for a weekly loss.

Spot gold was down 0.6% at $4,324.39 per ounce as of 0538 GMT, while U.S. gold futures for December delivery slid nearly 1% to $4,379.20.

Ilya Spivak, head of global macro at finance content network Tastylive, said there is some speculative capital taking profit in gold due to the lack of a near-term catalyst. However, he also believes that gold may be setting up for a meaningful rally now, with the potential to break through $4,400 and reach $5,000 by year end.

The drop in U.S. July nonfarm payrolls last week and softer inflation data this week have reduced expectations of a rate hike next month, making gold more attractive relative to yield-bearing assets.