Gold price halts rally as market assesses Fed policy, trade
Gold was little changed on Wednesday, following its longest streak of gains since February, as traders booked profits while they continue to monitor global trade developments and the US Federal Reserve’s rate cut outlook.
Spot gold slipped 0.1% to $3,378.21 per ounce as of 11 a.m. ET, trading within a narrow range for the day. US gold futures were flat at $3,433.40 an ounce in New York.
“We view this as a bit of a pullback… a little profit-taking from the recent move higher in the midst of a quieter time on the economic front, and a little lesser need for that safe-haven demand,” David Meger, director of metals trading at High Ridge Futures, said in a note.
Bullion had logged gains for three consecutive sessions, driven by signs of weakness in the US economy, as employment growth data last Friday came in weaker than expected.
With the new data, traders now see an over 87% chance of a Fed rate cut next month, up from 63% earlier, as per CME FedWatch. A rate cut would bode well for gold, as the metal pays no interest.
The US central bank is also on the cusp of a leadership shuffle. On Tuesday, US President Donald Trump said he will name a Fed board nominee by week’s end and has narrowed options to replace chair Jerome Powell.
On the trade front, Trump has added further inflationary pressure by warning that he will increase levies on countries that persist in buying Russian oil, as well as slapping duties on semiconductor and pharmaceutical imports soon.
Gold has climbed nearly 30% this year as investors have sought safety amid heightened trade conflicts, geopolitical tensions and eroding trust in dollar-denominated assets.
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