Gold prices fell on Wednesday (October 22) to a nearly two-week low, following their sharpest one-day decline in five years in the previous session, as investors booked profits ahead of key US inflation data due later this week.
Spot gold fell 1.7% to $4,054.34 an ounce, as of 1:42 p.m. ET (1742 GMT), after rising as high as $4,161.17 earlier in the session. US gold futures for December closed 1.1% lower at $4,065.40 an ounce.
Gold has hit multiple record highs and is up 57% this year, driven by geopolitical tensions, economic uncertainty, expectations of a US interest rate cut, and strong inflows into ETFs. Gold fell 5.3% on Tuesday, after hitting a record high of $4,381.21 in the previous session.
"Given the aggressive upward movement over the past few weeks, it's not entirely surprising to see some profit-taking ahead of Friday's CPI report," said David Meger, director of metals trading at High Ridge Futures. Technically, gold is supported by its 21-day moving average at $4,005.
Friday's US Consumer Price Index (CPI) report, delayed due to the ongoing US government shutdown, is expected to show that core inflation held at 3.1% in September. Investors are almost fully pricing in a 25 basis point interest rate cut at next week's US Federal Reserve meeting.
Gold, a non-yielding asset, tends to benefit in a low interest rate environment. Meanwhile, Russia said on Wednesday that it is still preparing for a potential summit between President Vladimir Putin and US President Donald Trump. Investors are also awaiting clarity on a potential meeting next week between Trump and Chinese President Xi Jinping.
"We maintain our bullish outlook for gold and silver through 2026, and after a much-needed correction/consolidation, traders will likely pause before concluding that the developments driving this year's historic rally are not over," said Ole Hansen, head of commodity strategy at Saxo Bank, in a note.
Among other metals, spot silver fell 1.6% to $47.95 an ounce. Silver fell 7.1% on Tuesday. Platinum rose 4.5% to $1,620.83, while palladium gained 0.1% to $1,409.80. (alg)
Source: Reuters
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