Record Profit Taking After Gold Prices: Market is Tense

Gold Prices Start the Week with a Decline

On the second trading day of the week, gold prices have started to trade with a slight decline. Investors, in line with expectations that the U.S. Federal Reserve (Fed) will continue with interest rate cuts, turned to profit-taking after the record high of $4,381.38 reached the previous day.

Profit-taking and Safe Haven Demand

After climbing to $4,381.38 late last night, spot gold is trading at $4,348.65 with a decrease of 0.16% this morning. KCM Trade Chief Market Analyst Tim Waterer commented on the situation, stating, "Profit-taking and a weakening in safe-haven demand have somewhat slowed the upward momentum in gold. However, as long as the Fed continues its current interest rate cut policy, I believe that any pullbacks will be seen as buying opportunities."

Market Expectations for Interest Rate Cuts

Markets have fully priced in expectations of a quarter-point interest rate cut this month and another cut in December. This situation increases the interest in safe-haven assets like gold.

Consumer Price Index Data and Government Shutdown Possibility

On the other hand, the Consumer Price Index (CPI) data, which was delayed due to the government shutdown in the U.S., is expected to be released this Friday. It is anticipated that the data will show a year-over-year increase of 3.1% in September. As the government shutdown enters its 20th day as of Monday, no positive result was achieved in the tenth vote held in the Senate.

White House Economic Adviser Kevin Hassett expressed his belief that the government shutdown will come to an end this week. Developments regarding this situation may affect the market reactions of investors.