Gold prices eased on Thursday as investors booked profits after a record-breaking rally pushed the metal above the $4,000 per ounce mark for the first time. The rally was driven by growing economic and geopolitical uncertainties and rising expectations of further U.S. interest rate cuts.
As of 10:13 a.m. PST, spot gold was up 1.55% at $4,038.58 per ounce, according to data reported by Mettis Global. Meanwhile, U.S. gold futures for December delivery slipped 0.7% to $4,042.60.
Fed Minutes Highlight Rate-Cut Outlook
Minutes from the Federal Reserve’s September 16–17 meeting revealed that officials agreed the risks to the U.S. labor market had increased enough to justify a rate cut. However, policymakers remained cautious due to persistent inflation and uncertainty over the broader economic impact of higher borrowing costs, CNBC reported.
Market expectations remain strong for additional rate cuts. The CME FedWatch Tool indicated a 95% probability of a 25-basis-point cut in October and an 83% chance of another in December.
Gold, a non-yielding asset, typically benefits from lower interest rates and periods of economic or political instability.
Geopolitical and Economic Volatility Boosts Safe-Haven Demand
This week’s volatility has been shaped by political turmoil in Japan and France, along with an ongoing U.S. government shutdown. These factors have renewed safe-haven demand, pushing investors toward bullion.
The yellow metal has surged 54% year-to-date, supported by strong central bank purchases, robust inflows into gold-backed ETFs, a weaker U.S. dollar, and rising retail investor interest amid escalating trade and geopolitical tensions.
ETF Holdings Reflect Investor Confidence
Holdings of the SPDR Gold Trust, the world’s largest gold-backed ETF, edged up 0.14% to 1,014.58 tons on Wednesday, compared with 1,013.15 tons a day earlier. The gradual rise underscores continued investor confidence in gold’s long-term appeal.
Other Precious Metals Show Mixed Performance
Among other precious metals, spot silver rose 0.1% to $48.91 per ounce after touching a record $49.57 on Wednesday. Meanwhile, platinum fell 0.7% to $1,650.60, and palladium dropped 1% to $1,435.25.
