Gold Retreats from Record High as Focus Shifts to Fed Meeting

Gold prices saw a slight decline on Wednesday, influenced by a modest rise in the dollar and profit-taking activities, after the precious metal hit a record high in the previous session. This comes amidst expectations that the Federal Reserve will cut interest rates.

Price Movements and Market Expectations

Spot gold fell by 0.2% to $3681.23 per ounce by 06:56 Abu Dhabi time, after touching a record peak of $3702.95 yesterday. U.S. gold futures for December delivery also dropped by 0.2% to $3718.90.

Tim Waterer, a senior market analyst at KCM Trade, stated that gold's climb to $3700 was supported by a falling dollar and bets that the Federal Reserve might signal more rate cuts before the end of the year. He added that profit-taking near the $3700 mark pushed the precious metal below that level. However, Waterer believes that if the Federal Reserve adopts a "very dovish tone" in its meeting, gold could see a new rally.

The Fed Meeting and Its Potential Impact

The U.S. central bank is expected to cut its interest rate by a quarter point later today to support the labor market. Investors will closely monitor the statements of Federal Reserve Chairman Jerome Powell to gauge whether the pace of monetary easing will continue. Lower interest rates reduce the opportunity cost of holding non-yielding bullion, making it more attractive to investors.

Former U.S. President Donald Trump had previously called on Powell to make a "bigger" rate cut. In a related development, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose by 0.32% to 979.95 tons.

Prices of Other Precious Metals

• Silver: Fell by 1.3% to $41.98 per ounce.

• Platinum: Gained 0.1% to $1392.25.

• Palladium: Rose by 0.5% to $1182.21.