Gold retreats from recent highs with markets eyeing Fed rate move

WASHINGTON: Gold prices slipped on Monday as easing geopolitical tensions dampened safe-haven demand, with investors now turning their attention to upcoming US inflation data that could shape expectations for the Federal Reserve’s next interest rate move.

Spot gold was down 0.7 percent at $3,376.67 per ounce as of 0248 GMT, retreating after reaching its highest level since July 23 on Friday. US gold futures for December delivery also fell sharply, losing 1.5 percent to $3,439.70.

Analysts said the pullback came as tensions surrounding the war in Ukraine appeared to cool. Markets reacted to news that US president Donald Trump will meet Russian President Vladimir Putin on August 15 in Alaska to discuss a possible end to the conflict.

“This easing of geopolitical risk saw gold give up some ground after Friday’s rally,” said Matt Simpson, senior analyst at City Index.

Attention is now on US consumer price data due Tuesday. Economists expect tariffs to push core inflation up by 0.3 percent, taking the annual rate to 3 percent, still above the Fed’s 2 percent target. A stronger reading could bolster the dollar and limit gold’s gains, though Simpson noted that buyers may step in if prices drop further.

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Gold’s recent strength has been underpinned by expectations of lower US interest rates. A weaker-than-expected jobs report last week boosted bets that the Fed will cut rates in September, with markets pricing in about a 90 percent chance of a reduction and at least one more cut before year-end. Lower interest rates typically support non-yielding assets like gold.

Trade negotiations are also in focus as Trump’s August 12 deadline for a deal between Washington and Beijing approaches.

In the futures market, COMEX gold speculators increased their net long positions by 18,965 contracts to 161,811 in the week to August 5, showing continued bullish sentiment.

Among other precious metals, spot silver fell 0.8 percent to $38.02 per ounce, platinum slipped 0.9 percent to $1,320.45, and palladium eased 0.3 percent to $1,122.69.

Gold price in Pakistan

Gold prices in Pakistan fell on Saturday, mirroring a decline in the global market. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of gold in the local bullion market dropped by Rs300, closing the week at Rs362,400 per tola.

Similarly, the rate for 10 grammes decreased by Rs257, settling at Rs310,699.

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