Gold retreats from highs as investors await signs of rate cut

Gold prices retreated from their highs on Tuesday, after rising on Western cash flows and optimism about a U.S. interest rate cut, as investors prepare for the minutes of the latest Federal Reserve meeting to clarify the extent of the cut.

Spot gold was steady at $2,514.03 an ounce by 0710 GMT after hitting an all-time high of $2,531.60 on Tuesday. U.S. gold futures rose 0.1% to $2,551.80.

Gold has gained about $470, or 22%, since the start of the year, and geopolitical tensions, uncertainty over the upcoming U.S. presidential election and a possible interest rate cut are expected to help support the precious metal and lift it to higher levels, according to Reuters.

“Gold’s increased luster reflects market expectations that the Fed will cut rates further,” said Christopher Wong, FX strategist at OCBC. According to the CME Group’s FedWatch tool, market participants are pricing in a rate cut at the Fed’s September meeting, with a 70% chance of a 25 basis point cut.