Gold prices dropped during European trading on Wednesday, continuing their retreat from record highs due to active profit-taking. Additionally, the strengthening dollar is adding pressure on the precious metal.
Recent hawkish comments from Fed Chair Jerome Powell have lowered expectations for a 0.5% U.S. interest rate cut in November. Investors are now looking ahead to key U.S. labor data expected later this week.
Prices
Gold prices increased by 0.7% today, reaching $2,644 per ounce, with a session high of $2,663.
On Tuesday, gold surged 1.1%, continuing its gains and nearing the record high of $2,685.
The rise was supported by strong demand for safe-haven assets following Iran's missile strikes against Israel, sparking fears of a broader conflict in the Middle East.
The Dollar
The dollar index climbed 0.1% on Wednesday, marking its third consecutive session of gains and nearing a two-week high of 101.39 against a basket of major currencies.
Powell
In a speech in Tennessee earlier this week, Fed Chair Jerome Powell adopted a bullish stance, suggesting the Federal Reserve is likely to proceed with 0.25% rate cuts in the future, without any urgency to lower rates further.
According to the Fed Watch tool, the probability of a 0.5% Federal Reserve interest rate cut in November stands at 39%, while there is a 61% chance of a 0.25% rate cut.
This comes ahead of key U.S. private sector employment data, followed by the crucial payroll report on Friday.
The SPDR
Gold holdings in the SPDR Gold Trust increased by 2.88 tonnes yesterday, bringing the total to 874.82 tones.
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