Gold extends retreat from record high; US inflation data in focus

Gold prices fell further on Wednesday, as investors took profits from bullion’s recent record rally while awaiting US inflation data due later this week for more cues on the Federal Reserve’s interest rate-cut path.

FUNDAMENTALS

* Spot gold was down 0.3% at USD 4,113.54 per ounce, as of 0115 GMT. Bullion fell more than 5% on Tuesday in its steepest fall since August 2020.

* US gold futures for December delivery climbed 0.5% to USD 4,129.80 per ounce.

* US President Donald Trump said he expected to reach a fair trade deal with Chinese President Xi Jinping when the two meet next week in South Korea, and played down the risks of a clash over the issue of Taiwan.

* Gold prices have gained about 56% this year, reaching an all-time peak of USD 4,381.21 on Monday, bolstered by geopolitical and economic uncertainties, rate-cut bets and sustained central bank buying.

* Investors now look forward to the release of US consumer price index report for September on Friday. The report has been delayed due to the US government shutdown.

* The Fed will lower its key interest rate by 25 basis points next week and again in December, according to a Reuters poll of economists who remain deeply divided on where rates will be by the end of next year.

* Meanwhile, the European Central Bank, which meets next week, is not expected to deliver a rate cut any time soon.

* Gold tends to appreciate when interest rates are low as they reduce the opportunity cost of holding non-yielding bullion.

* Elsewhere, spot silver fell 0.9% to USD 48.29 per ounce, platinum slipped 1.1% to USD 1,534.44 and palladium was flat at USD 1,406.76 per ounce

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu)