Gold ingots
Gold futures tumbled as the dollar gained strengthREUTERS

The overnight gold futures rally was reversed on Friday (5 August) as traders indulged in booking profits and a positive US jobs report boosted the dollar.

At 2:15pm BST, Comex gold futures contract for December delivery was down 1.11% or $15.20 to $1,352.20 an ounce, after the dollar received a boost following the news that 255,000 jobs were added to the US economy over the month of July. It sent the greenback higher against a basket of global currencies, including the euro and the sterling.

Silver futures also tumbled for a second successive session on hedging calls by traders, with the September Comex contract down 2.19% or 45 cents to $20 an ounce. Concurrently, spot platinum was 1.06% or $12.30 lower at $1,146.65 an ounce.

Jameel Ahmad, vice president of research at FXTM, said: "Gold has moved $20 lower at the time of writing and away from its recently returned pre-Brexit levels above $1,350 as a result of a sudden momentum of dollar strength.

"There is still a distinct likelihood due to the ongoing external uncertainty that gold can move higher over the medium and longer-term, although this increased optimism over the US economy and momentum for the dollar has taken some of the shine away from the asset at least for now. The same could be said for silver and it appears that both metals are going to at least reverse some of their gains early in the week following a sudden buying spree from investors for safe-haven assets."

Away from precious metals, the oil market's misery continued for yet another week with little sign of the oversupply drag on prices being lifted. At 2:22pm BST, the Brent front month futures contract was down 0.09% or nine cents to $44.25 per barrel, while the West Texas Intermediate was 0.10% or four cents to $41.89 per barrel, as fears over inventory overhang kept both benchmarks in negative territory as the weekend approached.

Overnight, the WTI closed below $40 per barrel for the first time in four months. The over 20% decline in oil prices since early June has left the analyst community divided. Citigroup and Bank of America Merrill Lynch have predicted that the current oil price slump would be short-lived.

However, Barclays' analysts said: "Demand growth remains lacklustre and has not made significant inroads to clear the inventory overhang for oil.

"With the macroeconomic picture worsening, and Saudi Arabia unlikely to exhibit much restraint as Iran seeks incremental market share", the market was heading for a tough remainder of the year.

Finally, analysts at Societe Generale expect a better balance between supply and demand, thereby "limiting the ongoing price correction".