Gold Prices Fall from Record Highs

Gold prices declined in Asian trade on Thursday as the rally in the yellow metal cooled, with market attention focused on U.S. interest rate cuts and recession fears.

The yellow metal surged to record highs earlier this week due to rising expectations that the Federal Reserve would cut rates in September. However, profit-taking and a rebound in the dollar pulled gold down on Thursday.

Spot gold decreased by 0.5% to $2,500.55 per ounce, while December gold futures fell by 0.4% to $2,547.05 an ounce at 00:15 ET (04:15 GMT). Spot gold previously peaked at $2,532.05 on Wednesday.

Rate Cut Bets Persist Amid Recession Jitters

Gold’s record prices came after minutes from the Fed’s late-July meeting indicated a favorable outlook for lower interest rates as inflation decreases. The minutes fueled predictions for a rate cut in September, although opinions diverged between a 25 or 50 basis point reduction, as shown by CME Fedwatch.

A sizable downward revision in payroll data for the year ending March 2024, released on Wednesday, revived concerns about a potential recession due to a cooling labor market. While fears of a recession restricted broader positive movements in financial markets, gold experienced declines from profit-taking, as the dollar rebounded from seven-month lows.

Attention now turns to Fed Chair Jerome Powell’s address at the Jackson Hole Symposium on Friday. Lower rates would likely benefit gold investments, reducing the opportunity cost of investing in non-yielding assets. Other precious metals saw mild gains in this context but trailed behind gold.

Platinum futures dropped by 0.4% to $970.00 per ounce, while silver futures fell by 0.3% to $29.448 per ounce.

Copper Dips on Global Growth Concerns

Among industrial metals, the recovery in copper prices halted on Thursday due to renewed concerns over slowing growth in the U.S. Continued worries about a Chinese slowdown persisted, although demand in China showed slight improvement this week.

Benchmark copper futures on the London Metal Exchange remained steady at $9,262.50 per ton, while one-month copper futures dropped by 0.2% to $4.1930 per pound.