Gold prices fell slightly on Tuesday as investors booked profits after the yellow metal hit a new record high in the previous session, supported by hopes of further interest rate cuts by the US Federal Reserve and increased demand for safe haven assets.
Spot gold fell 0.5% to $4,331.75 per ounce, after hitting a record high of $4,381.21 on Monday. US gold futures for December delivery settled at $4,356.30 per ounce.
Profit-taking and declining safe-haven flows have limited gold's advance today, Tim Waterer, senior market analyst at KCM Trade, told Reuters. Any pullbacks will be seen as buying opportunities as long as the Fed continues its current rate-cutting approach.
The CME FedWatch tool shows that markets are fully pricing in a quarter-point rate cut this month and another in December. As a non-yielding asset, gold is known for its strong performance in a low-interest-rate environment.
Waterer added, The current rise in gold prices still has room to run, unless US CPI data, due later this week, shows unexpected upward surprises.
The data, scheduled for release on Friday after being delayed due to the US government shutdown, is expected to show the index rising 3.1% year-on-year in September, according to economists polled by Reuters.
The US government shutdown extended into its 20th day on Monday, after the Senate failed last week for the tenth time to break the impasse. White House economic advisor Kevin Hassett said on Monday that the shutdown is likely to end this week.
The shutdown delayed the release of key economic data, leaving investors and policymakers in an information vacuum ahead of next week's Federal Reserve meeting.
On the trade front, US Treasury Secretary Scott Besant is expected to meet with Chinese Vice Premier He Lifeng in Malaysia this week in an attempt to avoid escalating US tariffs on Chinese goods.
In other precious metals markets, spot silver fell 1.2% to $51.83 per ounce, platinum fell 0.7% to $1,627.53, and palladium rose 0.1% to $1,497.62 per ounce.
