Gold prices eased in Asian trading on Thursday, retreating from record highs as investors took profits and the U.S. dollar stabilized ahead of key labor and interest rate indicators.
Earlier this week, the yellow metal soared past $3,500 an ounce, driven by expectations that the Federal Reserve could reduce interest rates later this month. Concerns over elevated government debt in developed economies also supported safe-haven demand for gold.
Spot gold declined 0.8% to $3,531.69 per ounce, while December gold futures dropped 1.3% to $3,589.92 per ounce by 01:14 ET (05:14 GMT).
Profit-Taking Follows Record Gains
Gold hit an all-time high of $3,578.80 per ounce earlier in the week, spurred by multiple factors driving safe-haven buying. However, easing worries about the Fed’s independence prompted some profit-taking.
U.S. trade uncertainty also bolstered gold, after an appeals court deemed most of former President Donald Trump’s tariffs illegal. Trump indicated he plans to appeal to the Supreme Court, warning that rulings against his levies could undermine his administration’s recent trade deals.
Questions over Fed independence lingered amid legal challenges surrounding Trump’s attempt to remove Fed Governor Lisa Cook. Markets were reassured, however, when Stephen Miran, Trump’s nominee for the Fed, committed to maintaining the central bank’s autonomy.
A softer dollar earlier this week had lifted gold and other precious metals, though a modest recovery in the greenback prompted a broad pullback from recent peaks. Spot platinum fell 0.9% to $1,411.09 per ounce, and spot silver slipped nearly 1% to $40.83 per ounce.
Industrial Metals Pull Back
Benchmark copper on the London Metal Exchange dropped 0.8% to $9,909.50 a ton, while COMEX copper futures fell 1.1% to $4.5685 per pound, retreating from near six-month highs. Copper had risen earlier this week on speculation that China, the world’s largest importer, may release additional stimulus measures to boost domestic growth and metal demand.
Fed Rate Cuts and U.S. Jobs in Focus
Expectations that the Fed will lower rates in September have supported metals markets. CME FedWatch data show a nearly 97% probability that the central bank will cut rates by 25 basis points at its September 16-17 meeting.
Investors are also awaiting Friday’s U.S. nonfarm payroll report for insights into the labor market. Several Fed officials have indicated that a cooling labor market could encourage rate cuts, echoing comments from Chair Jerome Powell in August. July’s JOLTS job openings came in weaker than anticipated, reinforcing signs of a cooling labor market, while August PMI data pointed to ongoing contraction in U.S. manufacturing.
Lower interest rates tend to benefit non-yielding assets such as gold, as reduced rates diminish the opportunity cost of holding the metal.
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