Gold Prices Fall From Record Highs; rate cuts, recession in focus By Investing.com

Investing.com– Gold prices eased from record highs in Asian trade on Thursday as gains in the yellow metal cooled as the market focused on falling U.S. interest rates and raising recession fears.

The yellow metal hit a record high this week amid growing belief that the Federal Reserve will begin cutting rates in September.

But a mix of profit-taking and a rebound in the dollar took gold off its highs on Thursday.

was down 0.5% at $2,500.55 an ounce, while December expiry was down 0.4% at $2,547.05 an ounce by 00:15 ET (04:15 GMT) . Spot gold hit a high of $2,532.05 an ounce on Wednesday.

Rate cut bets persist, but labor market data fuels recession jitters

Gold’s record highs came as the Fed’s meeting in late July showed policymakers were largely in favor of lower interest rates amid progress in reducing inflation.

The minutes cemented bets on a September easing, although traders were divided on a cut of 25 or 50 basis points, it showed.

A sharp downward revision to payrolls data for the year to March 2024 released on Wednesday sparked renewed fears that a cooling labor market will lead to a US recession.

But while recession fears capped a broader risk-on move in financial markets, gold still fell amid some gains, while the dollar rebounded from recent seven-month lows.

The focus is now on an address at the Jackson Hole Symposium on Friday.

Lower rates bode well for gold as they lower the opportunity cost of investing in non-yielding assets. Other precious metals posted slight gains on the notion, but mostly tailed off.

fell 0.4% to $970.0 an ounce, while it fell 0.3% to $29.448 an ounce.

Copper falls on global growth concerns

Among industrial metals, a rally in prices stalled on Thursday amid renewed concerns about slowing US growth. Lingering concerns about a Chinese slowdown also weighed, although domestic copper demand improved marginally this week.

The benchmark on the London Metal Exchange held steady at $9,262.50 a tonne, while on the month it fell 0.2% to $4.1930 a pound.