Mubasher: Gold prices on Wednesday retreated from their highest level recorded in six years, as US Federal Reserve officials played down expectations of rate cuts, as investors locked in profits, Reuters reported.

By 8:34 am GMT, spot gold dropped by 0.92% to $1,410.33 per ounce, after hitting $1,438.63 per ounce in the prior session, its highest since 14 May 2013, while US gold futures fell by 0.24% to $1,415.30 per ounce.

“The combination of length that was built-up in the market over the short-term, coupled with Fed coming in and shaking the trees last night has really flushed out a lot of the weaker longs in the market,” SPI Asset Management managing partner Stephen Innes was quoted by Reuters.

Fed chairman, Jerome Powell, asserted the autonomy of the central bank, saying that it is “insulated from short-term political pressures,” pushing back against President Donald Trump’s repeated complaint about too high interest rates.

While this dismissed expectations for a half-percentage-point reduction at the Fed’s next policy meeting in July, market participants are still expecting at least quarter-percentage-point cut.

Moreover, St Louis Fed President James Bullard ruled out the economic conditions do not need to cut rates by 50 basis points (bps) next month.

“Gold has had a strong ‘melt up’ over the last month [so] some short-term profit taking is to be expected,” Singapore’s United Overseas Bank markets strategy head Heng Koon How was quoted by the news agency.

In addition, the yellow metal lost its appeal, as the US dollar gained on Wednesday, recovering from multi-month lows.

At 8:38 am, the US dollar index, which tracks the greenback against six major peers, rose by 0.13% to 96.27.

The US looks to restart trade negotiations with China, after the anticipated meeting between President Trump and his counterpart Xi Jinping in Japan at the Group of 20 (G20) summit.