Gold prices fell on Thursday (September 4), slightly off record highs as investors locked in profits, while attention turned to key US employment data for further insight into the Federal Reserve's policy direction.

Spot gold prices fell 0.4% to $3,542.97 per ounce as of 08:38 GMT. US gold futures for December delivery fell 0.9% to $3,601.40. Spot gold prices hit a record high of $3,578.50 on Wednesday amid growing speculation of a US Federal Reserve interest rate cut and lingering geopolitical and economic uncertainty.

"The market is overbought and needs to correct," said StoneX analyst Rhona O'Connell. "If jobless claims are significantly out of line, then we could see a reaction (in prices) – down if below, up if above." The focus is now on weekly jobless claims and the ADP report due today, as well as US non-farm payrolls data due on Friday.

The data showed that job openings fell more than expected to 7.181 million in July. Meanwhile, several Fed officials said on Wednesday that labor market concerns continue to strengthen their belief that an interest rate cut is imminent. The market is now pricing in a 98% chance of a 25 basis point rate cut this month, according to the CME Group's FedWatch tool.

Non-yielding gold typically performs well in low-interest rates and times of uncertainty. Adding to market concerns, US President Donald Trump said that Washington may have to "undo" the trade deals it has reached with the European Union, Japan, South Korea, and other countries if it loses its Supreme Court case on tariffs.

"If private investors diversify more into gold, we see the potential for gold prices to rise well above our $4,000 floor by mid-2026," Goldman Sachs said.

Elsewhere, spot silver fell 0.7% to $40.92 an ounce, after hitting its highest level since September 2011 on Wednesday.

Platinum fell 1.4% to $1,402.18, and palladium fell 1% to $1,136.12. (alg)

Source: Reuters