Gold Prices Decline After Record Levels Due to Profit Taking

Record Rise and Fall in Gold Prices

Gold reached an all-time high of $4,059.31 per ounce on Wednesday. However, prices pulled back due to profit-taking following this sharp rise.

Impact of Profit Realization

After a 1.4% increase in the previous session, gold experienced a 1% decline as of Thursday. Technical indicators suggest that gold has been in the "overbought" zone for the past month, which may have prompted profit realization among investors.

Declining Appeal as a Safe Haven

The "safe haven" quality of gold has somewhat diminished following statements from U.S. President Donald Trump indicating that a peace agreement in the Middle East is "very close."

Annual Performance and Geopolitical Effects

This year, gold has gained over 50% in value due to global trade tensions, uncertainty surrounding the independence of the U.S. Federal Reserve, and concerns regarding U.S. financial stability. Increasing geopolitical tensions have led investors to seek safe-haven assets. Moreover, central banks continue to make gold purchases without slowing down.

Current Market Situation

Spot gold, after reaching the $4,059.31 level on Wednesday, fell 0.3% to $4,031.21 per ounce as of 9:48 AM Singapore time on Thursday. Additionally, the Bloomberg Dollar Spot Index recorded a 0.1% decline.

Other Precious Metals

Platinum experienced a slight decline on Thursday, while palladium attempted to maintain its gains from the previous session. Supply constraints, along with continued inflows into metal-backed exchange-traded funds (ETFs), have been supporting prices. Silver showed a slight retreat but remained close to record levels according to Bloomberg's data dating back to 1993.