According to Jinshi Data, after the gold price rose to a new high, some traders took profits, causing the gold price to fall. The gold price once fell by 2%, as low as $2,731.
The U.S. released strong economic data, increasing the likelihood that the Federal Reserve will cautiously cut interest rates in the coming months. The PCE data showed that overall inflation was 2.1% on an annual basis, the lowest level since early 2021 and just above the central bank's 2% target.
Before today’s decline, gold prices had surged by more than a third this year, boosted by central bank buying and safe-haven demand from conflicts in the Middle East and Ukraine. The recent rally has pushed gold’s 14-day relative strength index above 70, a level that could suggest the market is overbought.
The U.S. presidential campaign is also creating uncertainty, highlighting gold’s role as a safe-haven asset. Ole Hansen, head of commodity strategy at Saxo Bank, said the Nov. 5 election could see gold prices fall by more than $100.