Gold prices weakened on Thursday as investors took profits after the precious metal just set a historic record in the previous session. At the same time, the softer tone of US President Donald Trump towards the Chairman of the US Federal Reserve (Fed) and the Iranian situation also reduced safe haven demand.
Spot gold prices fell 0.3%, to 4,608.77 USD/ounce in this afternoon's trading session. This precious metal hit an unprecedented high on Wednesday: 4,642.72 USD/ounce. US gold futures for February delivery fell 0.5% to 4,613 USD.
Gold prices are currently falling slightly after Mr. Trump said that the US may not intervene in Iran, causing safe haven demand to slow down. However, the bigger story behind the gold rally has not disappeared," said Ilya Spivak, Global Macro Director at Tastylive.
Tensions continue to escalate as Iranian leaders seek to extinguish the most serious wave of instability since the 1979 Islamic Revolution. Tehran also threatened US military bases in the region in response to Mr. Trump's repeated warnings of military intervention.
At the White House, the US President again sent a signal "waiting for developments", showing a more cautious stance on the crisis.
Mr. Trump also said on Wednesday that he had no plans to fire Fed Chairman Jerome Powell, despite the Department of Justice's criminal investigation. However, he remained open to changing the decision, saying it was "too early" to say anything in advance.
The market is waiting for US weekly jobless claims data in the first week of January, expected to be released on the same day. This will be an important signal for the Fed's monetary policy roadmap. Traders are currently forecasting that the Fed will cut interest rates twice this year.
The low interest rate environment and geopolitical and economic instability are factors that support non-profit assets like gold.
In other markets, spot silver prices fell 3.4% to 89.63 USD/ounce, after climbing to a record level of 93.57 USD/ounce in the previous session.
