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Gold gives up 2-week high as investors book profits

Gold gives up 2-week high as investors book profits

Mubasher: Gold prices retreated from the highest level since two weeks, trading lower on Thursday, as investors took advantage of the prior session’s gains to lock in profits, Reuters said.

By 7:58 am GMT, spot gold dropped by 0.4% to $1,420.76 per ounce, after hitting $1,428.40 per ounce, its highest since 3 July, while US gold futures went down by 0.1% to $1,421.90 per ounce.

It is worth noting that spot gold advanced by around 1.5% in the previous session as the US dollar dipped after weaker-than-expected housing market data on Wednesday raised the possibility of an interest rate cut by the Federal Reserve.

The Fed is widely expected to reduce borrowing costs by 25 basis points (bps) at the next policy meeting by the end of this month, with some wagers on a cut of 50 bps.

The US central bank reported on Wednesday that the national economy extended its growth at a “modest” pace in recent weeks, with resilient consumer spending and a “generally positive” outlook, even in the face of disruptions caused by the US trade policy.

The dollar earlier in the prior session scaled a one-week high, after robust US retail sales, but later inched lower as Treasury yields dropped on the US housing figures and worries over the unsettled US-Sino trade feud.

At 8:00 am GMT, the dollar index, which traces the greenback against six major rivals, fell by 0.1% to 97.09.

“A slightly weaker dollar and a clear preference from investors over the last 24 hours drove safe-haven assets higher,” CMC Markets chief strategist Michael McCarthy was quoted by Reuters.

Earlier in the week, US President Donald Trump threatened to slap additional $325 billion in Chinese goods with tariffs, which kept up pressure on Beijing.

“Bullion is likely to see strong support after the Fed’s Beige Book emphasised policymakers’ concern on negative impact of trade uncertainty,” a note by OANDA senior market analyst Edward Moya was quoted by the news agency.