Gold prices slump on profit-taking

Gold bars

Gold prices tumbled today, Dec. 12, as investors took profits after the yellow metal recorded its highest settlement in five weeks yesterday, thanks to expectations of monetary easing in the US and Europe besides global geopolitical woes.

February gold futures decreased 0.24%, or $6.70, to $2,750 per ounce at 10:55 am Makkah time, with spot prices also down 0.15% to $2,713.97 an ounce.

On the other hand, March silver futures climbed by 0.39%, or 12.8 cents, to $33.09 per ounce, in tandem with a 0.93% rise in platinum spot prices to $949.49 an ounce.

Gold profit-taking surged after the US inflation’s November reading matched average consensus, boosting chances of the Federal Reserve trimming interest rates by 25 basis points (bps) at next week’s policy meeting to nearly 99%, estimates by the CME FedWatch Tool showed.

The precious metal’s losses were limited today by a 0.23% decline in the US dollar index, which gauges the greenback's strength against a basket of six currencies, to stand at 106.47 points.

This is in addition to forecasts that the European Central Bank (ECB) will also cut its key interest rate by 25 basis points to 3% at its last meeting this year, scheduled for today.