Gold prices hover close to record peak despite profit-taking

SINGAPORE: Gold prices held firm on Wednesday, staying close to record highs as investors digested US Federal Reserve Chair Jerome Powell’s cautious remarks on interest rates and looked ahead to key inflation data later this week.

Spot gold was trading at $3,765.29 per ounce by 0403 GMT, just below Tuesday’s all-time peak of $3,790.82. US gold futures for December delivery slipped 0.5 percent to $3,798.50 as traders booked profits after the sharp rally.

Powell’s balancing act keeps markets guessing

Powell said on Tuesday the Fed would continue to balance the risks of stubborn inflation against a weakening job market in its policy decisions. His comments, which avoided giving clear signals on future rate hikes, kept gold traders cautious.

“Gold is being driven by two things right now: overbought technicals prompting profit-taking and Powell’s neutral tone,” said Kelvin Wong, senior market analyst at OANDA. He added that while prices could see a minor dip in the near term, the broader trend for the metal remains bullish.

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Gold’s relative strength index stood at 78, indicating overbought conditions. Still, safe-haven demand has kept the metal supported.

Eyes on inflation data

Attention now turns to US economic reports due later this week. Weekly jobless claims are expected on Thursday, followed by the Fed’s preferred inflation gauge, the Personal Consumption Expenditures index, on Friday.

“If inflation comes in hotter than expected, especially given the pressure from tariffs, gold could face some downward pressure,” said Kyle Rodda, analyst at Capital.com.

Goldman Sachs, in a note published Tuesday, said it expects quarter-point rate cuts in both October and December. It also flagged the possibility of a larger half-point cut if the US labour market weakens faster than forecast.

Wider market moves

The geopolitical backdrop also remains tense. NATO warned Russia on Tuesday it would use “all necessary military and non-military tools” to defend itself, while US President Donald Trump toughened his stance by saying Ukraine could reclaim all territory occupied by Russia.

In other precious metals, spot silver edged up 0.2 percent to $44.11 per ounce. Platinum rose 0.4 percent to $1,484.36 and palladium gained 1 percent to $1,231.85.

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