Gold prices dipped overnight as investors holding short positions took profits after nine straight sessions of gains, although the outlook remained bullish with prices hovering near a record peak.
Spot gold dipped 0.9 per cent to $US1,952.30 per ounce by 1831 GMT, set to break its longest winning streak since December 2017. US gold futures closed 0.6 per cent lower at $US1,942.30.
“We’ve seen gold’s positioning has started to bloat not only from the institutional side, but more recently we have really seen a surge in retail flows,” said Daniel Ghali, commodity strategist at TD Securities.
“All of this suggests that this is probably as good as it’s going to get for gold for the time being.”
Bullion traded close to Tuesday’s record high of $US1,980.57 per ounce in the last session after US Federal Reserve kept interest rates unchanged, while pledging to use its full range of tools for as long as necessary to recover from the pandemic.
The non-yielding metal, which benefits from low interest rates, is up over 28 per cent so far this year, supported by strong investment demand.
“In the short-term, the market could’ve been considered overbought and due for a correction,” said Kitco Metals senior analyst Jim Wyckoff, adding gold right now is seeing profit-taking by shorter-term futures traders.
On the longer and intermediate term basis, the market is trending higher and still in a bullish posture, Wyckoff added.
Meanwhile, a historic plunge in second-quarter US GDP and President Donald Trump’s tweet about delaying the US November presidential elections triggered a sell-off in US stocks and lower Treasury yields.
“People are panicking and fleeing the equity markets and you’re seeing that weighing on metals prices,” said Phillip Streible, chief market strategist at Blue Line Futures.
Other metals were also lower, with silver shedding 4.9 per cent to stand at $US23.22 per ounce, platinum down 3.1 per cent at $US895.20 and palladium dropping 4.4 per cent to $US2,061.96.