Gold off record high amid US rate cut hopes

Gold prices dropped in Thursday’s trading, retreating from the all-time highs reached earlier this week, as the U.S. dollar strengthened ahead of key employment data and a speech by Federal Reserve Chair Jerome Powell, which may offer further insights into interest rate expectations.

Gold’s Decline

Spot gold fell by 0.27% to $2,505.27 per ounce, trading below its record high of $2,531.60 set on Tuesday. Similarly, U.S. gold futures declined by 0.27% to $2,540.70.

Ilya Spivak, a global macroeconomist at Tastytrade, noted that the market has experienced fluctuations with slight gains and losses recently, indicating a phase of consolidation. He added, “From the minutes of the Federal Reserve’s July meeting, it seems that the Fed is ready to lower interest rates… The Fed needs to start cutting rates soon, or it risks over-tightening its monetary policy and unnecessarily harming the economy.”

Dollar Strength

After hitting its lowest level since late December on Wednesday, the dollar index rose by 0.2% at the time of reporting, driven by the release of the minutes from the Federal Reserve’s July 30-31 meeting, which showed that officials are leaning strongly toward cutting interest rates next month.

Typically, a lower interest rate environment increases the appeal of non-yielding assets like gold.

Investors are now awaiting the Jackson Hole Economic Symposium, which begins on Thursday, with Federal Reserve Chair Jerome Powell scheduled to speak on Friday. The market is also anticipating the release of new jobless claims data today.

Other Precious Metals

In other precious metals, silver fell by 0.17% to $29.55 per ounce, platinum dropped by 0.1% to $962.8, and palladium decreased by 0.76% to $958.50.