Bulls take profits ahead of non-farm payrolls, gold falls below the $3,520 mark during trading

During Thursday's Asian session, as investors took profits, spot gold continued to retreat from its historical high, once falling below $3,520 per ounce, dropping more than 1% intraday before rebounding sharply by $15. Spot silver followed the decline, falling below $41 per ounce, with an intraday drop of up to 1.5%.

Expectations that the Federal Reserve will soon resume rate cuts have pushed both gold and silver to record highs. The key U.S. employment data to be released later this week is seen as a crucial factor influencing the interest rate path.

Brian Lan, Managing Director of GoldSilver Central, said: "We have seen some profit-taking, but gold is still in a bull market at the moment. Expectations of rate cuts and concerns about the Federal Reserve's independence will increase safe-haven demand. Even if gold prices rise to $3,800 or even higher in the short term, we would not be surprised."

Wall Street is anticipating another weak jobs report. Forecasters expect non-farm payrolls to increase by only 75,000 in August, with the unemployment rate rising to a nearly four-year high of 4.3%.

Currently, more and more data seems to confirm that the job market is deteriorating. On Wednesday, the U.S. July JOLTs job openings unexpectedly fell from June's downwardly revised 7.36 million to 7.18 million, with expectations at 7.378 million, the lowest level in 10 months.

The Federal Reserve has already taken note of this. In an important speech at the end of last month, Federal Reserve Chairman Powell outlined the reasons for rate cuts, citing the potential deterioration of the job market as the main reason. For policymakers, their attention has quickly shifted to employment, rather than previous concerns about rising prices.

St. Louis Fed President Musalem, long considered a hawk, said on Wednesday: "At a time when downside risks to employment are rising, placing most of the weight on the inflation target may not provide sufficient support for a fully employed labor market."

Federal Reserve watchers and economists say that even stronger-than-expected employment data may not stop the Fed from cutting rates this month. Gregory Daco, Chief Economist at EY Parthenon, believes there is a 90% chance of a rate cut.

After the recent downward revisions, a sharp increase in employment may not trigger excessive concern, but it will raise questions about how quickly the Fed should cut rates.

Daco believes, "While a strong report would offset some of the previous weakness, some investors and experts may mistakenly interpret the report as a sign that the economy is not weakening."

JPMorgan analyst Patrick Jones said that a rate cut by the Fed that meets or exceeds expectations should prompt further inflows into gold ETFs, pushing gold prices to around $3,675 per ounce by the end of the year. On this basis, gold prices should reach $4,000 in the second quarter of next year and could soar to $4,250 by the end of 2026, especially if the Trump administration's attempt to remove Fed Governor Cook is successful.