Gold prices softened on Monday, having briefly surpassed the $2,500 mark in the prior trading session, as market participants took profits from the recent surge and awaited further signals from the Federal Reserve and Middle East developments. As of 11:57am ET (1557 GMT), spot gold had dipped 0.2 percent to $2,503.50 per ounce, just below the all-time high of $2,509.65 reached on Friday. Meanwhile, U.S. gold futures inched up 0.2 percent to $2,542.10.
David Meger, director of alternative investments and trading at High Ridge Futures, commented, "We anticipate a potential consolidation or pullback in gold prices if the Fed merely suggests a 0.25 bp rate reduction without indicating a possibility for a more substantial 0.50 bp cut." According to the CME FedWatch Tool, there is a 77.5 percent probability that the Fed will reduce interest rates by 25 basis points in September. Investors are now looking ahead to the release of the Fed's latest policy meeting minutes on Wednesday and Fed Chair Jerome Powell's address at the Jackson Hole economic symposium on Friday.
Reuters technical analyst Wang Tao predicts that gold could decline to between $2,479 and $2,487 if it fails to breach the $2,507 resistance level. However, UBS analyst Giovanni Staunovo believes that gold could continue to climb, potentially hitting $2,600 per ounce by year-end, especially if Powell signals an imminent rate cut. In the physical market, several Chinese banks have received new gold import quotas from the central bank, reflecting expectations of renewed demand despite current high prices.
Safe-haven demand for gold remains robust due to ongoing geopolitical tensions, notably the Israel-Iran-Hamas conflict, according to Achilleas Georgolopoulos, investment analyst at forex broker XM. Silver prices increased by 1.1 percent to $29.33 per ounce, while platinum rose 0.3 percent to $957.43. Conversely, palladium fell 2.2 percent to $930.33.
