FX.co ★ Gold Eases Further from Record High

Gold prices slipped below $3,740 per ounce on Thursday, marking the second consecutive session of declines after hitting an all-time high of $3,790. The dip comes on the back of robust economic indicators that support the case for elevated interest rates. The United States' GDP growth was adjusted upwards to 3.8% for the second quarter, accompanied by a surprising increase in durable goods orders and a decline in initial jobless claims to their lowest in two months. These developments have tempered the previously anticipated three rate cuts by the Federal Reserve this year, consequently raising the opportunity cost of holding non-yielding bullion. However, the persistent demand for safe-haven assets and a strategic shift away from the dollar have bolstered gold's appeal, resulting in a 45% increase in its price since the start of the year. Unclear economic policies, coupled with aggressive geopolitical stances from the US, along with pressures on the Federal Reserve from the White House, and indications of unsustainable deficit spending, have led foreign markets to favor gold holdings. In response, the People's Bank of China has been accumulating gold for ten consecutive months, and Chinese infrastructure is positioning itself as a gold custodian for international markets.