Gold Slips as Investors Lock In Profits, But Optimism and Haven Demand Underpin
Gold prices declined as investors secured profits following a record-breaking session. However, optimism regarding the timing of the next Federal Reserve rate cut and escalating haven demand continue to provide support.
Gold retreated by 2.1% and is trading approximately $60 below Monday's all-time high of $2,956.19 per ounce. Profits were booked after data indicated that U.S. consumer confidence had witnessed its steepest decline since August 2021 due to concerns over the economic outlook. The data also reinforced concerns that uncertainty surrounding the Trump administration's policies is impacting households.
Swap markets currently anticipate a quarter-point rate cut by the Fed in July. This provides a boost to gold prices as lower rates favor the precious metal, which does not generate interest. The safe-haven demand triggered by persistent uncertainty over Trump's trade and geopolitical agendas also supports bullion prices.
Investors will closely monitor Friday's core personal consumption expenditures price index, the Fed's preferred inflation measure, for insights into the monetary policy direction of the central bank.
At 11:33 a.m. in New York, spot gold was down 2.0% to $2,893.00 per ounce. The Bloomberg Dollar Spot Index experienced a 0.1% decline. Silver, palladium, and platinum also recorded declines.