The Crossbill News Desk
Gold prices retreated on Tuesday (October 21) as investors locked in profits following a record-setting rally in the previous session, with expectations of US interest rate cuts and strong safe-haven demand having driven the metal to fresh highs.
Spot gold fell 1.6% to $4,287.89 per ounce as of 0803 GMT, after touching an all-time high of $4,381.21 on Monday. US gold futures for December delivery slipped 1.3% to $4,303.60 per ounce, Reuters reported.
The dollar index rose 0.2%, making bullion more expensive for investors holding other currencies.
“Gold prices are still yet to go much higher, but the speed is being a bit aggressive and as a result of that, we will get pullbacks each time we hit those fresh highs,” Nitesh Shah, commodities strategist at WisdomTree told Reuters.
A mix of geopolitical tensions, economic uncertainty, sustained central bank purchases, robust investment inflows, and expectations of lower US interest rates have driven gold 63% higher so far this year.
Investors are now awaiting the US consumer price index (CPI) data, due Friday, which is expected to show a 3.1% year-on-year increase for September. The figures are likely to reinforce market expectations that the Federal Reserve will lower interest rates by 25 basis points at its upcoming meeting.
Gold, a non-yielding asset, tends to gain in low-rate environments. Meanwhile, Asian equities rose on Tuesday, lifted by optimism over easing US-China trade tensions and a rally in Japan’s Nikkei as Sanae Takaichi prepared to take office as the country’s next prime minister, adding pressure on the yen.
“There are still many market participants that did not participate in (gold’s) rally and are looking to get exposure if there is a price setback, limiting the downside for now, in my view,” said UBS analyst Giovanni Staunovo.
In other precious metals, spot silver dropped nearly 4% to $50.39 per ounce, platinum shed 3.9% to $1,574.05, and palladium declined 4.5% to $1,428.25.
Increased silver flows from the US and China to London’s spot market have eased liquidity constraints in the world’s largest over-the-counter precious metals hub, according to traders and analysts.
Spot gold fell 1.6% to $4,287.89 per ounce as of 0803 GMT, after touching an all-time high of $4,381.21 on Monday. US gold futures for December delivery slipped 1.3% to $4,303.60 per ounce, Reuters reported.
The dollar index rose 0.2%, making bullion more expensive for investors holding other currencies.
“Gold prices are still yet to go much higher, but the speed is being a bit aggressive and as a result of that, we will get pullbacks each time we hit those fresh highs,” Nitesh Shah, commodities strategist at WisdomTree told Reuters.
A mix of geopolitical tensions, economic uncertainty, sustained central bank purchases, robust investment inflows, and expectations of lower US interest rates have driven gold 63% higher so far this year.
Investors are now awaiting the US consumer price index (CPI) data, due Friday, which is expected to show a 3.1% year-on-year increase for September. The figures are likely to reinforce market expectations that the Federal Reserve will lower interest rates by 25 basis points at its upcoming meeting.
Gold, a non-yielding asset, tends to gain in low-rate environments. Meanwhile, Asian equities rose on Tuesday, lifted by optimism over easing US-China trade tensions and a rally in Japan’s Nikkei as Sanae Takaichi prepared to take office as the country’s next prime minister, adding pressure on the yen.
“There are still many market participants that did not participate in (gold’s) rally and are looking to get exposure if there is a price setback, limiting the downside for now, in my view,” said UBS analyst Giovanni Staunovo.
In other precious metals, spot silver dropped nearly 4% to $50.39 per ounce, platinum shed 3.9% to $1,574.05, and palladium declined 4.5% to $1,428.25.
Increased silver flows from the US and China to London’s spot market have eased liquidity constraints in the world’s largest over-the-counter precious metals hub, according to traders and analysts.
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