Gold prices retreats from record highs as investors await Federal Reserve meeting minutes

(MENAFN) Gold prices eased from their all-time highs on Wednesday following a surge driven by Western capital inflows and optimistic expectations of a U.S. interest rate cut. Spot gold was stable at USD2,514.03 per ounce as of 0710 GMT, having reached a peak of USD2,531.60 on Tuesday. Meanwhile, U.S. gold futures saw a modest increase of 0.1 percent, trading at USD2,551.80. The precious metal has risen by approximately USD470, or 22 percent, since the beginning of the year. Factors such as ongoing geopolitical tensions, uncertainty surrounding the upcoming U.S. presidential election, and potential interest rate cuts are anticipated to sustain gold's upward momentum.

The recent uptick in gold's value reflects market sentiment that the Federal Reserve might further reduce interest rates. According to Christopher Wong, a foreign exchange strategist at OCBC, the rising appeal of gold is tied to expectations of additional Fed rate cuts. Market projections, as indicated by the CME Group's FedWatch tool, suggest a 70 percent probability of a 25 basis point rate cut during the Fed's September meeting. This speculation has been bolstered by a weaker dollar and declining 10-year U.S. Treasury yields, which make non-yielding gold a more attractive investment option.

Investors are now closely monitoring the minutes from the Federal Reserve's July policy meeting, which are scheduled for release later today, as well as a forthcoming speech by Fed Chairman Jerome Powell at the Jackson Hole symposium on Friday. These upcoming events are expected to provide further insights into the Fed's economic outlook and potential future monetary policy decisions, influencing gold's market trajectory. 

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