Gold prices fall slightly from record levels

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Gold prices fell on profit-taking, moving away from all-time highs hit at the start of the week, as the dollar edged higher ahead of jobless claims data and a speech by Federal Reserve Chairman Jerome Powell tomorrow.

Minutes of the Federal Reserve’s last meeting, released yesterday, showed officials were ready to start cutting interest rates.

Gold prices hit new all-time highs of $200,521 per ounce and 200,741 lira per gram yesterday ahead of the Fed minutes and Jerome Powell’s speech.

U.S. stocks and bond prices rose, while the dollar weakened, after the release of the minutes, in which a “vast majority” of Fed officials said a September rate cut would be appropriate if data came in as expected.

Although the futures market predicts a 25 basis point rate cut next month, there is a one-third chance that the rate will be cut by 50 basis points. It is expected that the rate will be cut by more than 200 basis points by July 2025.

Low interest rates make gold a more attractive investment by reducing the appeal of competing interest-bearing assets such as Treasury bonds and the U.S. dollar. Conversely, high interest rates drive investors away from gold.

Therefore, economic data that influences the Fed’s decisions is also closely watched by the gold market.