Investing.com — Gold prices fell from record highs in Asian trading on Thursday after the rally in the yellow metal cooled, while the market’s focus remained on U.S. interest rate cuts and fears of a recession grew.
The yellow metal rose to record highs this week amid growing belief that the Federal Reserve will cut interest rates in September.
But a mix of profit-taking and a rebound in the dollar pulled the gold price off its peaks on Thursday.
fell 0.5% to $2,500.55 per ounce, while the December maturity at 00:15 ET (04:15 GMT) fell 0.4% to $2,547.05 per ounce. Spot gold peaked at $2,532.05 an ounce on Wednesday.
Interest rate cuts remain, but labor market data fuels recession jitters
Gold’s record highs came as the Fed’s meeting in late July showed policymakers largely in favor of lower interest rates while making progress in reducing inflation.
The minutes confirmed expectations for an easing in September, although traders were divided over a 25 or 50 basis point cut, it showed.
A sharp downward revision to payrolls data for the year to March 2024, released on Wednesday, sparked renewed fears that a cooling labor market will result in a US recession.
But while recession fears limited broader risk in financial markets, gold still fell despite some profit-taking, while the dollar also recovered from recent seven-month lows.
The focus now is on a speech at the Jackson Hole Symposium on Friday.
Lower interest rates are a good sign for gold as they reduce the opportunity cost of investing in non-yielding assets. Other precious metals made slight gains on this idea, but largely lagged behind gold.
fell 0.4% to $970.0 per ounce, while the price fell 0.3% to $29.448 per ounce.
Copper is falling due to concerns about global growth
In industrial metals, a recovery in prices stalled on Thursday amid renewed concerns about slowing US growth. Ongoing concerns about a Chinese growth slowdown also weighed in, although copper demand in the country improved marginally this week.
The benchmark on the London Metal Exchange was steady at $9,262.50 per tonne, falling 0.2% in one month to $4.1930 per pound.
