Gold Retreats as Traders Book Profit After Rally to Fresh Record
Gold retreated as some investors booked profit after the metal’s rally to a fresh record.
Bullion fell by as much as 2% to $2,731.65 an ounce after earlier reaching a fresh record of $2,790.10. The drop followed the release of strong economic data, which boosts the chance of a cautious approach to interest-rate cuts in the months ahead. Lower borrowing costs tend to benefit the precious metal, as it doesn’t pay interest.
On Thursday, data showed overall inflation in the US came in at 2.1%, the lowest since early 2021 and just above the central bank’s 2% goal. Inflation-adjusted consumer spending advanced 0.4%, an acceleration from the prior month supported by continued growth in wages and salaries.
Prior to Thursday’s dip, gold had surged by more than a third this year, buoyed by central-bank buying and haven demand amid conflicts in the Middle East and Ukraine. The recent advance had taken the metal’s 14-day relative-strength index above 70, a level that can suggest the market has become overbought.
The tight US presidential race between Kamala Harris and Donald Trump is also creating uncertainty that’s underscoring bullion’s role as a place of safety for investors. The Nov. 5 election may open gold up to a correction of more than $100 an ounce, according to Ole Hansen, head of commodity strategy at Saxo Bank A/S.
Spot gold was 1.8% lower to $2,738.51 an ounce as of 11:30 a.m. in New York. The Bloomberg Dollar Spot Index weakened slightly. Silver, palladium and platinum all fell.
Source : Bloomberg
