Gold retreats as investors take profits

Gold bars

Gold prices reversed their uptrend today, Aug. 27, as investors took profits after the precious metal achieved a new record level at the end of the first session of this week, amid the growing prospect of US monetary easing.

Bullion for December delivery plunged by 0.16%, or $4.20, to $2,551 an ounce at 09:43 am Makkah time, with spot prices also down 0.20% to $2,512.94 per ounce.

Silver futures for September delivery held ground at $30.05 an ounce, while platinum spot prices turned 0.65% lower to $956.77 per ounce.

Gold’s decline today followed hitting yesterday a new record close for the seventh time this August, as investors took profits from escalating geopolitical woes in the Middle East, and the possibility of a Federal Reserve interest rate cut next month.

Expectations of a 25-basis-point (bp) Fed rate cut at the September meeting rose to 71.5% from 64% a day earlier, while the probability of a 50-bp reduction dropped to 28.5% from 36%, according to the CME FedWatch Tool. However, this suggests a 100% chance of a start to the US monetary easing cycle next month.