The price of gold fell by 0.3% to $4,153.49 per ounce, futures fell by 0.5% to $4,150. Investors are taking profits, awaiting the Fed's decision on a rate cut amid conflicting signals.
Gold edged lower on Thursday due to profit-taking after rising to a near two-week high in the previous session, as investors assessed the possibility of a US interest rate cut in December amid conflicting signals from the Federal Reserve. Reuters reports, writes UNN.
Details
Spot gold fell 0.3% to $4,153.49 per ounce as of 06:16 GMT. Gold futures for December delivery fell 0.5% to $4,150 per ounce.
Investors are trying to lock in profits after Wednesday's rally… The Fed is not giving clear signals about further steps, so gold is simply consolidating
– said GoldSilver Central Managing Director Brian Lan.
Conflicting signals on the timing and scale of rate cuts have accelerated hedging through derivatives linked to overnight rates, as investors seek protection from heightened policy uncertainty.
Some Fed officials, including New York Federal Reserve President John Williams and Board of Governors member Christopher Waller, have said that a policy easing in December may be appropriate due to labor market weakness, which is weighing on government bond yields.
Benchmark 10-year US bond yields remained near a one-month low in the previous session.
At the same time, their position contrasts with several regional Fed presidents who advocate for a pause in easing until inflation shows a more convincing approach to the 2% target.
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US rate futures currently price in an 85% chance of a rate cut in December, according to CME FedWatch tool.
Gold, which does not yield interest, typically performs well in low interest rate environments.
Recall
According to fintech expert and co-founder of Concord Fintech Solutions Olena Sosedka, the upward trend in gold prices is reinforced by the unstable geopolitical situation in the world.
"Wars, trade conflicts, unpredictable decisions of world leaders – all this creates an atmosphere of constant instability, in which gold becomes a universal insurance. So the jump in the value of gold is not just a financial event, it is a marker of investor confidence in the modern economy. And for the fintech market, this is a clear signal: technology can make finance more convenient, but the basis of trust is always built on simple and understandable values," – summarized Olena Sosedka.
She noted that the current rise in the value of gold is only the tip of the iceberg, because at a global level it indicates investors' preparation for a weakening dollar. The depreciation of the American currency makes gold more accessible to buyers in international markets, which, in turn, increases demand and stimulates further price growth.
The main drivers of stable demand for gold remain central banks, primarily China and Russia. They are actively increasing their gold reserves, effectively implementing a de-dollarization strategy and demonstrating a desire to reduce dependence on the American currency.
