KUALA LUMPUR: Gold prices retreated from record highs on Thursday as investors moved to lock in gains, following a strong rally sparked by renewed concerns over US President Donald Trump’s aggressive trade policies.
Spot gold dipped 0.8% to US$3,318.19 an ounce at 8:27 GMT, after briefly hitting an all-time high of US$3,357.40 earlier in the session. The precious metal remains up 2.5% for the week. US gold futures also edged lower by 0.5%, settling at US$3,330.50.
Market analysts attribute the pullback to profit-taking behaviour amid a marginally firmer US dollar, which has slightly weakened gold’s appeal.
“Likely the reversal off fresh all-time highs can be attributed to some profit taking on the highs. A slightly firmer tone to an otherwise weak US dollar likely took the edge off gold,” said independent analyst Ross Norman. “Still, price dips are well bought into, suggesting underlying sentiment is very positive.”
The US dollar index rebounded modestly from near three-year lows on Thursday, increasing the cost of gold for international buyers.
Gold surged 3.6% on Wednesday, bolstered by Trump’s directive to investigate potential tariffs on critical mineral imports, in addition to ongoing reviews into pharmaceutical and semiconductor goods. These developments raised fresh concerns over inflation and supply chain disruptions.
US Federal Reserve Chair Jerome Powell, in remarks on Wednesday, indicated that the central bank would wait for additional data before adjusting interest rates. However, he warned that the administration’s tariff strategy could drive inflation further from the Fed’s target.
Historically considered a hedge against inflation, gold typically benefits from a low-interest-rate environment, further enhancing its attractiveness in the current economic climate.
“The market’s interpretation seems to be that gold would benefit either way,” said Carsten Menke, analyst at Julius Baer.
However, physical demand for gold in India remained subdued this week, as consumers were discouraged by the sharp price rally. Meanwhile, premiums remained stable in China, the world’s top gold consumer.
Norman noted that fading participation from traditional buyers could indicate that the rally is approaching its peak. “But it’s hard to see a scenario where gold would correct lower just now, other than being technically overbought and overextended,” he added.
Other precious metals also declined on Thursday. Spot silver slipped 1.2% to US$32.37 an ounce, platinum lost 0.6% to US$961.10, and palladium fell 2.5% to US$948.01.–REUTERS
