Gold Prices Retreat From Record Highs as Traders Eye Fed Cuts and Payrolls
Gold prices slipped in Asian trading on Thursday, pressured by profit-taking after hitting record highs earlier this week. The decline came as the U.S. dollar steadied, with markets awaiting fresh signals from upcoming labor market data and expectations of Federal Reserve interest rate cuts.
The precious metal surged above $3,500 an ounce this week, supported by strong safe-haven demand and growing conviction that the Fed will reduce rates later this month. Concerns over mounting government debt in developed economies also boosted gold’s appeal.
By 05:14 GMT, spot gold was down 0.8% at $3,531.69 per ounce, while December gold futures slipped 1.3% to $3,589.92 per ounce. Earlier in the week, spot gold hit a record of $3,578.80. Analysts noted that such gains left the metal open to profit-taking, particularly as concerns over Fed independence eased slightly.
Fed Policy, Trade Tariffs, and Political Risks Support Gold
Demand for gold was also lifted by uncertainty over U.S. trade tariffs after an appeals court ruled that many of President Donald Trump’s levies were unlawful. Trump vowed to appeal to the Supreme Court, warning that a ruling against his tariffs could undermine key trade agreements.
Political tensions surrounding the Federal Reserve remained in focus after Trump’s attempts to dismiss Fed Governor Lisa Cook sparked concerns about central bank independence. These fears were tempered somewhat when Stephen Miran, Trump’s nominee for the Fed, pledged to preserve the bank’s autonomy.
Gold and other metals also benefited earlier in the week from weakness in the U.S. dollar. However, a mild rebound in the greenback has since triggered a pullback across precious metals.
Other Precious and Industrial Metals
Spot platinum dropped 0.9% to $1,411.09 per ounce, while silver declined nearly 1% to $40.83.
In industrial metals, copper futures on the London Metal Exchange fell 0.8% to $9,909.50 per ton, while COMEX copper slipped 1.1% to $4.5685 per pound. Despite the drop, copper prices remain elevated on expectations that China will announce fresh stimulus measures to boost growth and increase demand.
Fed Rate Cuts and Payroll Data in Focus
Markets are betting strongly on a Fed rate cut in September. CME FedWatch data shows a 97% probability of a 25-basis-point reduction at the Fed’s September 16–17 meeting.
Traders are also awaiting Friday’s nonfarm payrolls report for further clarity on labor conditions. Recent economic data, including weak job openings and a contraction in manufacturing activity, reinforced expectations of a cooling economy and increased the likelihood of policy easing.
Lower interest rates generally favor gold and other non-yielding assets by reducing the opportunity cost of holding them.
