Gold slipped on Thursday as investors booked profits after prices hit more than one-month high earlier in the day on increased expectations of an interest rate cut by the Federal Reserve next week.
Spot gold shed 0.5 percent to $2,704.41 per ounce. It hit the highest since Nov. 6 earlier in the session.
US gold futures fell 0.5 percent to $2,744.60.
“It’s just profit booking because we’ve seen a good rally in gold due to various factors this week, including geopolitical tensions, China resuming gold purchases and the inflation number yesterday being in line with expectation,” said Ajay Kedia, director at Kedia Commodities, Mumbai.
“Overall, I think the current scenario remains supportive for gold.”
According to CME’s FedWatch Tool, traders now see a 98.4 percent chance of a 25-basis-points Fed rate cut on Dec. 18, compared with an about 86 percent odds before the US inflation report.
US consumer prices increased by the most in seven months in November, but that is unlikely to discourage the Fed from cutting rates for a third time next week against the backdrop of a cooling labor market.
Focus is now on US Producer Price Index data, due at 1330 GMT, for insights into the Fed’s 2025 policy. Meanwhile, the European Central Bank is all but certain to cut rates again on Thursday and signal further easing in 2025.
