Gold price dips as investors lock in profits after record high

WASHINGTON: Gold prices edged lower on Tuesday as investors booked profits following the metal’s record-breaking rally a day earlier, driven by hopes of further US Federal Reserve rate cuts and strong safe-haven demand.

Spot gold slipped 0.3 percent to $4,340.29 per ounce by 0248 GMT, after touching an all-time high of $4,381.21 on Monday. US gold futures for December delivery also eased slightly by 0.1 percent to $4,356.40.

Investors take a breather

According to KCM Trade Chief Market Analyst Tim Waterer, the slight decline reflected normal profit-taking after the sharp gains. “Profit-taking moves and an abating of safe-haven flows combined to just take the edge off the gold price today. Any pullbacks on gold will be viewed as buying opportunities while the Fed remains on their current rate-cutting trajectory,” he said.

Markets are now fully pricing in a quarter-point rate cut from the Fed this month and another in December, according to the CME FedWatch Tool. Gold, which offers no yield, generally benefits in a lower interest rate environment as it becomes more attractive compared to interest-bearing assets.

Waterer added that the rally could continue if upcoming US inflation data do not surprise investors. “The current gold rally has further room to run on the topside provided that US CPI data later this week doesn’t produce any nasty upside surprises,” he said.

Focus turns to inflation data and government shutdown

The US Consumer Price Index (CPI) data, now expected on Friday after a delay caused by the ongoing government shutdown, is forecast to show a 3.1 percent annual rise in September, according to economists surveyed by Reuters.

The shutdown entered its 20th day on Monday after the Senate failed for the tenth time to resolve the budget deadlock. White House economic adviser Kevin Hassett said he expected the impasse to end this week. The prolonged closure has postponed key economic data releases, leaving investors and policymakers with limited information ahead of the Fed’s policy meeting next week.

Trade talks in focus

In another development, US Treasury Secretary Scott Bessent is expected to meet Chinese Vice Premier He Lifeng in Malaysia this week in a bid to prevent a new round of US tariffs on Chinese goods. The talks come at a time when global markets remain sensitive to any sign of escalation in US-China trade tensions.

Other precious metals

Among other precious metals, spot silver fell 1.6 percent to $51.64 per ounce, platinum slipped 0.7 percent to $1,627.62, while palladium gained 0.5 percent to $1,503.17.