Gold eases from two-week high on profit-taking after Fed-driven rally

Gold fell on Thursday as investors booked profits after the metal hit a two-week high earlier in the session on increased expectations of a dovish monetary policy stance from the U.S. Federal Reserve.

Spot gold slipped by 0.28% to $1,422.6 an ounce. Prices had jumped about 1.5% in the previous session and extended gains early on Thursday to hit $1,426.80, gold’s highest since July 3.

Bullion had firmed on Wednesday after the Fed reported that the U.S. economy has continued to grow at a “modest” rate in recent weeks.

“At the moment, gold lacks a trigger to move beyond the levels we have seen earlier this year,” said Julius Baer analyst Carsten Menke, adding that prices between $1,420 and 1,425 are attracting profit-taking.

Menke said much attention is focused on the U.S. central bank and that there is “a little bit of disappointment potential” for gold bulls who jumped too strongly on expectations for cuts to interest rates.

Increased bets on a Fed rate cut have kept gold well supported above $1,400 and overall momentum is positive, analysts said.

The Fed is widely expected to cut a total of 75 basis points by the end of the year.

Global stock markets, meanwhile, found little relief as the trade tussle between the United States and China rumbles on, helping to support gold.

U.S. President Donald Trump kept up pressure on Beijing this week with a threat to put tariffs on another $325 billion of Chinese goods.

Bullion prices could climb to $1,439 an ounce after clearing resistance at $1,421, according to Reuters technical analyst Wang Tao.

Among other precious metals, silver rose 0.6% to $16.07, exceeding the $16 mark for the first time since February. Spot platinum was up 1% at $851.58 while palladium dipped 0.6% to $1,529.08.


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Ed Moya

Ed Moya

Senior Market Analyst, The Americas at OANDA
With more than 20 years’ trading experience, Ed Moya is a senior market analyst with OANDA, producing up-to-the-minute intermarket analysis, coverage of geopolitical events, central bank policies and market reaction to corporate news. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business and Sky TV. His views are trusted by the world’s most renowned global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Breitbart, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
Ed Moya