Gold price dips from six-month peak on short-term profit taking
Gold prices eased off on Wednesday after reaching a six-month peak last session as the market booked short-term profits while seeking fresh drivers.
Spot gold fell 0.6% to $1,801.21 per ounce by 11:40 a.m. ET, while three-month US gold futures declined 0.8% to trade at $1,808.80 per ounce.
[Click here for an interactive chart of gold prices]
Bullion’s losses were capped by a drop in both Treasury yields and the dollar, which kept prices above the $1,800 an ounce level throughout the session.
“You’re seeing a corrective pullback, some profit taking from the shorter-term futures traders. It’s mostly technical-trading with the lack of fresh fundamental news in this holiday week,” Jim Wyckoff, senior analyst at Kitco Metals, explained.
Gold has risen around $200 from more than a two-year low hit in September on expectations that the US central bank would slow its pace of interest rate hikes, increasing the appeal of the non-yielding asset.
“I see aggressive hawkish monetary policy of the Federal Reserve being mostly factored into prices. You’re starting to see inflation back down a little,” Wyckoff added, highlighting that China opening up further in 2023 could also help demand.
China on Monday scrapped its quarantine rule for inbound travellers, even as hospitals and funeral homes were under intense pressure from surging covid-19 cases. Its civil aviation authority said it would restore pre-pandemic flight procedures by the summer-autumn of 2023.
Traders now await Thursday’s initial jobless claims for fresh cues.
(With files from Reuters)