Gold Pulls Back from Record Highs After Fed's Hawkish Signals and Profit-Taking

Gold prices dipped on Thursday in Asian trading after briefly hitting another record high, as investors took profits and digested hawkish comments from U.S. Federal Reserve Chair Jerome Powell. Spot gold fell 0.7% to $3,320.56 per ounce at 03:40 ET (07:40 GMT), while June gold futures declined 0.4% to $3,334.61. Earlier in the session, gold had surged to an all-time high of $3,356.32, marking a second consecutive record peak.

The recent rally in gold has been fueled by geopolitical uncertainty, strong central bank buying, and persistent inflation concerns. However, Powell’s latest remarks dampened bullish sentiment. He reiterated that the Fed is unlikely to cut interest rates soon due to lingering inflation pressures and recent economic turbulence, including the introduction of new U.S. tariffs. Elevated interest rates typically weigh on gold prices by raising the opportunity cost of holding the non-yielding asset, while a stronger dollar also curbs demand for gold.

The pullback coincided with former President Donald Trump’s announcement of progress in formal tariff talks with Japan, adding another layer of uncertainty for global markets. Despite the decline, analysts believe gold continues to enjoy solid long-term support from ongoing macroeconomic risks.

Silver and platinum prices also retreated, with silver futures falling 1.6% to $32.470 per ounce and platinum slipping 1.1% to $969.75.

Meanwhile, copper prices dropped as the dollar strengthened and U.S.-China trade tensions flared. London Metal Exchange copper futures fell 0.4% to $9,172.15 a ton, while May copper futures declined 1.6% to $4.610 a pound. Market sentiment remains cautious, even as reports suggest China is open to negotiations. China, the top copper importer, faces a total tariff burden of 145%.