Gold slips as profit-taking, softer geopolitical tone hit safe-haven demand
Traders continue to anticipate two interest rate cuts this year
[BENGALURU] Gold slipped on Thursday (Jan 15) as investors booked profits after three consecutive sessions of record highs, while an apparent softer tone from US President Donald Trump on the Federal Reserve chair and Iran dampened safe-haven demand for bullion.
Spot gold was down 0.6 per cent at US$4,594.66 per ounce, as at 9.37 am. In the previous session, bullion hit a record high of US$4,642.72.
US gold futures for February delivery slipped 0.8 per cent to US$4,599.50.
Trump said on Wednesday that he has no plans to fire Jerome Powell despite a Justice Department criminal investigation into the Federal Reserve chair, but it was “too early” to say what he would ultimately do.
Analysts say worries of Fed independence and regarding trust in US assets have added to safe-haven demand for bullion.
Meanwhile, US retail sales rose above expectations in November, while PPI met monthly forecasts but exceeded annual estimates, following weaker-than-expected December core CPI figures released on Tuesday. Traders continue to anticipate two interest rate cuts this year.
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Later in the day, investor focus will be on US weekly jobless claims for the first week of January to assess labour market conditions for more clues on monetary policy.
A low-interest-rate environment, geopolitical and economic uncertainty traditionally favour non-yielding assets such as gold.
Trump said that Iran’s crackdown on nationwide protests appeared to be easing, while Tehran warned it would strike US military bases in the region if Washington launched an attack.
Elsewhere, Trump reiterated on Wednesday that the US needs Greenland and that Denmark cannot be relied upon to protect the island, even as he said that “something will work out” with respect to the future governance of the Danish overseas territory.
The remarks came shortly after a high-stakes meeting between US, Danish and Greenlandic officials.
Spot silver fell 5.3 per cent to US$87.88 per ounce after hitting an all-time high of US$93.57 earlier in the session.
Spot platinum receded 4 per cent to US$2,288.05 per ounce, a one-week high, after scaling a record peak of US$2,478.50 on Dec 29.
Palladium lost 2.5 per cent to US$1,753.53 per ounce and hovered near a one-week low. REUTERS
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