Gold prices fell on Thursday (September 19) amid profit-taking, after the yellow metal hit a record high in the previous session, as markets assessed the Federal Reserve's stance on further interest rate cuts.

Spot gold fell 0.4% to $3,643.40 an ounce at 1:51 PM EDT (5:51 PM GMT). U.S. gold futures for December delivery closed 1.1% lower at $3,678.30. The previous session saw volatile trading, with spot prices briefly touching a record high of $3,707.40 before retreating.

The U.S. dollar index strengthened 0.5%, making dollar-priced commodities more expensive for holders of other currencies. On Wednesday, the Fed announced its first interest rate cut since December and opened the door to further easing, but tempered its message with a strong inflation warning, raising doubts about the pace of future policy adjustments.

Fed Chairman Jerome Powell described the policy move as a risk-management cut in response to a weakening labor market, but emphasized that the central bank is in no rush to begin easing policy. "There was some confusion surrounding Powell's comments that the rate cut was a risk-management move, and that uncertainty has fueled profit-taking," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

"However, I think the long-term bullish trend (in gold) is still ongoing and the decline from yesterday's all-time high was corrective... every time gold hits a new high, it just lends additional credibility to the $4,000 target." Gold, which tends to perform well in low-interest rates and during periods of uncertainty, has gained nearly 39% so far this year.

Analysts at SP Angel reiterated in a note that the main driver of gold right now is the diversification of dollar reserves by BRIC central banks, particularly China, and added that the trend is expected to continue. Meanwhile, data showed that gold exports from Switzerland to China surged 254% in August compared to July.

Among other metals, spot silver rose 0.3% to $41.78 per ounce, platinum rose 1.6% to $1,384.95, and palladium rose 0.5% to $1,160.25. (alg)

Source: Reuters