Slight Decline in Gold Prices After Hitting Record Levels
Gold prices experienced a slight decline during trading on Thursday, September 4, affected by profit-taking after the precious metal hit new record levels in the previous session, amid ongoing expectations that the U.S. Federal Reserve will soon cut interest rates.
According to data, the price of gold in the spot market fell by 0.7% to $3531.13 per ounce, after reaching a record level on Wednesday at $3578.50. Futures contracts for gold for December delivery also fell by 0.1%, recording $3589.70.
Analysts believe that this decline is temporary and expected amid the strong upward trend, as positive sentiment continues to dominate the market. In this context, Brian Lan, the general manager of Gold Silver Central, told Reuters: "We have seen some profit-taking, but gold is still in a bullish market at the moment. Expectations for interest rate cuts and concerns about the Fed's independence will boost demand for safe havens."
Other traders also expressed optimism about the outlook for gold performance, with one trader stating: "It wouldn't be surprising if gold prices rise to $3800 or even higher in the near term."
Investors are now awaiting U.S. employment data scheduled for this week, which will provide additional indicators about the health of the economy and its potential impact on the Fed's decisions. This optimism came after data from the U.S. Labor Department on Wednesday showed a decline in job openings more than expected to 7.181 million jobs in July, reinforcing expectations for a more flexible monetary policy.
For their part, officials at the U.S. Federal Reserve confirmed that their concerns about labor market conditions support their move towards lowering borrowing costs. Christopher Waller, a member of the Fed's Board of Governors, stated that he believes the central bank "should begin to cut interest rates at its next meeting."
Financial markets significantly reflect these expectations, as the CME Group's FedWatch tool indicates that traders are currently pricing in a 97% probability that the Fed will cut interest rates by 25 basis points at the conclusion of its two-day meeting on September 17, up from 92% before the employment data was released.
