Gold prices edged lower on Tuesday as investors booked profits after hitting a record high in the previous session amid expectations of further interest rate cuts by the US Federal Reserve and high demand for safe-haven assets. Reuters reports, writes UNN.
Details
The spot gold price fell 0.3% to $4,340.29 per ounce as of 02:48 GMT, after reaching an all-time high of $4,381.21 on Monday. US gold futures for December delivery fell 0.1% to $4,356.40 per ounce.
Profit-taking and a decrease in demand for safe-haven assets have somewhat eased the pressure on gold prices today... All dips will be seen as buying opportunities as long as the Fed continues its rate-cutting path.
According to CME's FedWatch tool, the market is fully pricing in a quarter-point Fed rate cut this month and another in December. Gold, which does not yield interest, typically rises in price during periods of low rates.
The current gold rally still has potential for further upside, unless US inflation data, due later this week, turns out to be unexpectedly high.
The data release, expected on Friday after a delay due to the "shutdown," has been postponed. The consumer price index is expected to have risen 3.1% year-on-year in September, according to a Reuters poll of economists.
The US government has been in a "shutdown" for the 20th consecutive day, after the Senate failed to overcome disagreements for the tenth time. White House economic adviser Kevin Hassett said on Monday that the "shutdown" is likely to end this week.
The government shutdown has delayed the release of key economic indicators, leaving investors and policymakers without crucial information ahead of the next Fed meeting.
In trade, US Treasury Secretary Scott Bessent is scheduled to meet with Chinese Vice Premier He Lifeng in Malaysia this week to avoid an escalation of tariff tensions between the two countries.
Other precious metals: silver fell 1.6% to $51.64 per ounce, platinum fell 0.7% to $1,627.62, and palladium rose 0.5% to $1,503.17.
Recall
According to fintech expert and co-founder of Concord Fintech Solutions Olena Sosedka, the trend of rising gold prices is reinforced by the unstable geopolitical situation in the world.
"Wars, trade conflicts, unpredictable decisions of world leaders - all this creates an atmosphere of constant instability, in which gold becomes a universal insurance. So the jump in the value of gold is not just a financial event, it is a marker of investors' confidence in the modern economy. And for the fintech market, this is a clear signal: technology can make finance more convenient, but the basis of trust is always built on simple and understandable values," summarized Olena Sosedka.
She also added that the rising price of gold is just the tip of the iceberg. Globally, it means that investors are preparing for a weakening dollar. A weaker dollar makes gold cheaper for international buyers, creating a powerful incentive for its price to rise.
As is known, the key structural demand for the precious metal is formed by central banks, primarily China and Russia. They are aggressively buying up gold bars, openly demonstrating a strategy of abandoning the dollar and unwillingness to rely solely on the American currency.