Gold falls from record high as traders take profits

Bengaluru — Gold slipped on Thursday due to profit-taking after bullion scaled a record peak on the expectation for a US interest rate cut, while investors looked forward to key US jobs data due this week.

Spot gold fell 0.8% to $3,530.69/oz by 5.11am GMT. Bullion hit a record high of $3,578.50 on Wednesday. US gold futures for December delivery were down 1.3% to $3,590.

“We’ve seen a bit of profit-taking, but gold is still in a bull market at this point in time. Rate-cut expectations and worries over the Federal Reserve’s independence are going to add to safe-haven demand,” GoldSilver Central MD Brian Lan said.

“We won’t be surprised even if gold prices go up to $3,800 or even higher in the near-term.”

The US labour department said on Wednesday that job openings fell more than expected to 7.181-million in July.

Several Fed officials said labour market concerns continued to animate their belief that rate cuts lay ahead. Fed governor Christopher Waller said he thought the Fed should be cutting at its next meeting.

Traders are currently pricing in a 97% chance of a 25-basis-point rate cut at the end of the US central bank’s two-day policy meeting on September 17, up from 92% before the data, according to CME Group’s FedWatch tool.

Non-yielding gold typically performs well in a low-interest-rate environment.

The focus now shifts to the US nonfarm payrolls data due on Friday. The August nonfarm payrolls are expected to have grown by 78,000 jobs, according to Reuters poll, versus 73,000 in July.

Meanwhile, on Wednesday, President Donald Trump said that the US might have to “unwind” trade deals it had reached with the EU, Japan and South Korea, among others, if it lost a Supreme Court case involving tariffs.

Elsewhere, spot silver fell 0.8% to $40.82/oz, after hitting its highest since September 2011 in the last session. Platinum slipped 0.8% to $1,409.53 and palladium fell 1.6% to $1,129.82.

Reuters