Profit-taking saps gold’s strength
Thu July 25 2024
Gold prices fell nearly 1% on Thursday, as investors booked profits ahead of US economic data that could offer more cues on when the central bank will cut interest rates this year and by how much.
Spot gold fell 0.9% to $2,377.29/oz by 2.17am GMT. US gold futures dropped 1.6% to $2,376.70. “When you look from a fundamental perspective, there are no factors pressuring gold. So, it looks like we are seeing some profit-taking and from a technical perspective, prices could move lower,” said Kelvin Wong, Oanda senior market analyst for Asia-Pacific.
Markets are awaiting the US GDP reading due at 12.30pm GMT and personal consumption expenditures (PCE) data — the Fed’s favoured measure of inflation — on Friday to calibrate their expectations of when rates might be cut. Traders are expecting that the Federal Reserve will deliver a long-awaited rate cut in September. Non-yielding bullion’s appeal tends to shine in a low-interest-rate environment.
If PCE data showed that inflation was slowing and the Fed could cut rates in September, then we would see a resurgence in gold prices, Wong said. Meanwhile, a Reuters poll showed that gold prices are poised for a fresh run to record highs in coming months while platinum and palladium will stay below $1,000/oz in 2024.
“A continuation of election-related uncertainty and rising geopolitical threats will add more volatility and likely impact broader macro variables,” the World Gold Council said. “This, in turn, could drive investors to evaluate how they might mitigate risk in their own portfolios and draw them towards a safe-haven asset like gold.”
Among other metals, spot silver fell 2.8% to $28.18/oz, platinum eased 0.8% to $940.40 and palladium slipped 1.5% to $918.63.