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Gold demand falls as profit-taking and a softer geopolitical climate hit the safe-haven market

Gold demand falls as profit-taking and a softer geopolitical climate hit the safe-haven market
Gold demand falls as profit-taking and a softer geopolitical climate hit the safe-haven market

The price of gold fell on Thursday, as investors took profits after the yellow metal had hit a new record the previous day. A softer tone by U.S. president Donald Trump towards the Federal Reserve Chair and Iran also dampened demand for safe havens. As of 0501 GMT, spot gold was down by 0.7% to $4,589.71 an ounce. The previous session saw bullion reach a record of $4,642.72. U.S. Gold Futures for February Delivery fell by 0.9% to $4,594.10.

"Today we are seeing gold down a little bit, after (Trump said) maybe we won't?intervene with Iran, staving-off safe-haven demands, but the bigger story (of metal's rising) is not going anywhere," said Ilya Spivak. He is the head of global macro for Tastylive. Iran's leaders, desperate to quell the worst domestic unrest since 1979, threatened U.S. bases in the area in order to counter Trump's repeated threats for military intervention. Trump, at the White House, suggested that he would be adopting an "await-and-see" attitude toward the crisis. The president stated on Wednesday that, despite the Justice Department's criminal investigation into Powell, he had no plans to fire him. However, it was still "too soon" to determine what he will do in the end.

Later in the day the U.S. Weekly Jobless Claims for the First Week of January are released. This could give clues about the Fed's monetary policies. The traders expect two interest rate cuts in 2019.

Gold is traditionally favored by low interest rates, economic and geopolitical uncertainty. Silver spot fell 5.5%, to $87.62 an ounce, after reaching a session high of $93.57. Spot platinum fell 3.3% to a new high of $2,305.90 an ounce after reaching a record $2,478.50 peak on December 29. Palladium fell 2.6% per ounce to $1,778.80 and was hovering near a week-low. Ishaan arora, Bengaluru. Sherry Jacob Phillips and Harikrishnan Nair edited the story.

(source: Reuters)