Having recorded a fresh all-time high of $4,381.21/oz. on Monday on expectations of more Federal Reserve interest rate cuts, Spot Gold eased on Tuesday, as investors likely took profits after recent bullish run.
“Profit-taking moves and an abating of safe-haven flows combined to just take the edge off the gold price today… any pullbacks on gold will be viewed as buying opportunities whilst the Fed remains on their current rate-cutting trajectory,” KCM Trade Chief Market Analyst Tim Waterer was quoted as saying by Reuters.
“The current gold rally has further room to run on the topside provided that U.S. CPI data later this week doesn’t produce any nasty upside surprises,” Waterer added.
Annual headline consumer inflation in the US probably picked up to 3.1% in September from 2.9% in August, according to market consensus.
And, annual core CPI inflation probably steadied at 3.1% in September.
Markets are now pricing in about a 99% chance of a 25 basis point Fed rate cut in October and a 97% chance of another 25 bps cut in December.
Lower interest rates tend to reduce the opportunity cost of holding Gold, which pays no interest.
Spot Gold was down 0.52% on the day to trade at $4,333.25 per troy ounce.
Strong central bank buying, US tariff policies, potential rate cuts by the Federal Reserve, robust ETF inflows and geopolitical uncertainty have fueled Gold’s rally to a series of record highs this year. Year-to-date, the yellow metal has surged 65.12%.
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