Gold slips from record peak; markets eye US economic data

Gold prices eased on Wednesday as the US dollar firmed, retreating from a record high scaled in the previous session, while investors hunkered down for economic data due later in the week for further cues on the Federal Reserve’s policy path.

Spot gold fell 0.8% to USD 3,734.58 per ounce, as of 01:56 p.m. ET (1756 GMT), after hitting a record high of USD 3,790.82 on Tuesday.

US gold futures for December delivery settled 1.2% lower at USD 3,768.1.

The US dollar index rose about 0.6%, making dollar-priced bullion more expensive for other currency holders. The benchmark 10-year Treasury yields also drifted higher.

“Gold is still digesting some of the commentary coming out of the Federal Reserve yesterday and also geopolitical tensions with Russia… It’s slightly cautious ahead of some economic data coming out,” said Phillip Streible, chief market strategist at Blue Line Futures.

Fed Chair Jerome Powell on Tuesday offered no new clues on the future course of interest rates, stressing that the central bank must carefully balance the risks of stubborn inflation against a slowing job market.

Markets are pricing in two additional 25-basis-point rate cuts this year — one in October with a 94% probability and another in December with a 77% probability, according to the CME FedWatch tool.

Focus is now on Thursday’s weekly US jobless claims data and Friday’s release of the US Personal Consumption Expenditures index, the Fed’s preferred inflation gauge.

On the geopolitical front, Ukraine’s military said on Wednesday it struck two oil pumping stations overnight in Russia’s Volgograd region.

Safe-haven gold becomes more attractive during periods of geopolitical and economic uncertainty. It also tends to thrive in a low-interest-rate environment as it is a non-yielding asset.

Spot silver fell 0.4% to USD 43.84 per ounce. Platinum fell 0.7% to USD 1,468.44, and palladium lost 0.7% to USD 1,211.45.

(Reporting by Noel John in Bengaluru; additional reporting by Kavya Balaraman; Editing by Shilpi Majumdar, Shailesh Kuber, and Shinjini Ganguli)