Spot Gold eased from recently achieved all-time high of $4,642.72/oz. on Thursday, as market players likely booked profits after recent rally.
A technical correction may have also taken place, as Gold prices have reached too far, too fast, as indicated by the 14-day Relative Strength Index (RSI).
Despite the pullback, the yellow metal remained within striking distance of its record level, as investors continued to evaluate the potential depth of the Federal Reserve’s policy easing, while global uncertainties persisted.
US producer inflation data for November turned out to be softer than expected and, similar to earlier US CPI report, suggested that price pressures were gradually easing. This could provide room for the Federal Reserve to lower interest rates.
Investors are now expecting two or three rate cuts by the Fed this year, compared to FOMC projection of just one 25 bps cut.
On the geopolitical front, US President Donald Trump, to an extent, calmed market anxiety over possible US military campaign against Iran. Trump said he had received assurances that Iranian authorities would stop killing protesters and that he believed there was no current plan for large-scale executions.
Trump also addressed market concerns about the Federal Reserve’s leadership. He said that he had no plan to remove Federal Reserve Chair Jerome Powell, despite an ongoing probe.
Federal prosecutors threatened to indict Fed Chair Jerome Powell over his congressional testimony on a Fed building renovation project. Powell said this was a “pretext” intended to mount more pressure on the US central bank to cut interest rates.
Spot Gold was last down 0.53% on the day to trade at $4,602.28 per troy ounce.
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