Gold slides from 5-week high, down over 1% on profit-taking
Gold slipped over 1% on Thursday as investors booked profits after it briefly reached a five-week high earlier in the session and squared positions ahead of a U.S. Federal Reserve meeting next week.
Spot gold lost 1.2% at $2,684.15 per ounce by 01:40 p.m. ET (1840 GMT), while U.S. gold futures settled 1.7% lower at $2,709.40. Bullion climbed to its highest level since Nov. 6 earlier in the session.
Meanwhile, the ECB cut interest rates for the fourth time this year, by quarter of a percentage point and kept the door open to more.
Spot silver fell 2.7% to $30.04 per ounce, platinum was down 1.1% to $929.64 and palladium shed 1.1% to $970.96.
"Bulls maintain near-term momentum, though a pullback may occur ahead of the Federal Reserve meeting as investors lock in profits," said Zain Vawda, market analyst at MarketPulse by OANDA.
"Focus will shift post-meeting to guidance on the January session and future policy direction, which will be critical in determining the sustainability of further market gains."
The CME's FedWatch tool places the likelihood of a December rate cut at 98%.
While there are increasing chances of a rate cut next week, inflation is going up, said Alex Ebkarian, chief operating officer at Allegiance Gold, adding that "the Fed is in very much of a bind."
U.S. producer prices rose more than expected in November amid a surge in the cost of food. This was followed by Wednesday's inflation data showing consumer prices increased by the most in seven months in November.
Jobless claims also rose in the latest week pointing towards an easing labor market making it more likely that the Fed will cut interest rates next week for the third time, despite little progress in lowering inflation down to its 2% target in recent months.
Source : Reuters
