Gold slips from two-week peak as traders book profits

Gold Refinery gold shavings. Picture: AFP PHOTO/OZAN KOSE
Gold Refinery gold shavings. Picture: AFP PHOTO/OZAN KOSE

Bengaluru — Gold prices pulled back from a two-week high to trade lower on Thursday, as some investors took advantage of the last session’s gain to book profits.

Spot gold was down 0.3% at $1,422.68/oz, as of 3.50am GMT, after hitting its highest since July 3 at $1,428.40.

It rose nearly 1.5% in the previous session as the dollar slipped after weaker-than-expected US housing data increased prospects for an interest rate cut by the Federal Reserve.

US gold futures were steady at $1,423.70/oz. 

“A slightly weaker dollar and a clear preference from investors over the last 24 hours drove safe-haven assets higher,” said Michael McCarthy, chief market strategist at CMC Markets.

“From gold’s point of view, it approached a key resistance level around $1,430, and having failed to push through it, it looks like short-term trading investors are taking advantage of gains.”

The dollar index was down 0.2% against a basket of major currencies on Thursday. It climbed to a one-week peak in the previous session on robust US retail sales, but nudged lower as Treasury yields fell in the wake of weak US housing market data and concerns about the unresolved US-China trade conflict.

Meanwhile, the Fed is widely expected to lower interest rates by 25 basis points at its policy meeting at the end of July, with some in the market even betting on a 50-basis-point cut.

The Fed reported on Wednesday that the US economy continued growing at a “modest” rate in recent weeks, with consumers continuing to spend and a “generally positive” outlook overall even in the face of disruptions caused by the US trade policy.

Earlier in the week, US President Donald Trump kept up the pressure on Beijing with a threat to put tariffs on another $325bn of Chinese goods.

“Bullion is likely to see strong support after the Fed’s Beige Book emphasised policymakers’ concern on negative impact of trade uncertainty,” Edward Moya, a senior market analyst at Oanda, said in a note.

Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.48% to 803.18 tons on Wednesday from 799.37 tons on Tuesday.

Among other precious metals, silver climbed 0.8% to $16.10/oz, its highest since February 20, and on track for a fifth consecutive session of gains.

Platinum rose 0.9% to $850.20/oz, while palladium gained 0.3% to $1,541.70. 


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