At 0724 GMT, spot gold was down 0.2% at $2,503.10 an ounce, and U.S. gold futures were up 0.2% at $2,541.50.
Enthusiasm for a probable interest rate cut by the United States Federal Reserve In September, gold hit an all-time high of $2,509.65 on Friday. This, coupled with rising geopolitical tensions and strong central bank buying, has seen gold rise more than 20% so far this year.
“Gold has been chasing the psychological $2,500 level for several months, and now that it has reached it, we are seeing some natural profit-taking taking place,” he said. Tim WatererChief Market Analyst, KCM Trade.
Last week, US retail sales data was strong and jobless claims were lower than expected, along with subdued inflation data, restoring confidence in the world’s largest economy. Traders are confident that the US Federal Reserve will cut rates next month and the focus now turns to the size of the reduction. According to CME’s FedWatch tool, they estimate a 75.5% chance of a 25 basis point cut. “Traders will be looking to Jerome Powell’s tone and language at Jackson Hole (on Friday) to fill in some of the blanks in this regard,” Waterer added. The market will also be looking to the minutes of the Federal Reserve’s July policy meeting on Wednesday for further clues.
A slowing U.S. economy, upcoming rate cuts, lower yields, a weaker dollar, persistent geopolitical risks and strong central bank demand will drive gold higher over the long term, said Kyle Rodda, financial markets analyst at Capital.com.
Several Chinese banks have received new gold import quotas from the central bank, anticipating revived demand despite record prices.
Elsewhere, spot silver rose 0.4% to $29.11 an ounce, platinum was almost unchanged at $954.65 and palladium fell 0.7% to $944.43.
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