Gold prices slide further as dollar firms, investors book profits

Gold prices extended declines on Wednesday, following their steepest daily fall since 2020 in the previous session, after an initial recovery gave way to renewed selling with investors locking in profits and a stronger dollar adding pressure.

Spot gold was down 1.4% at $4,067.31 per ounce, as of 0941 GMT, reaching a near two-week low, after rising as much as $4,161.17 earlier in the session. U.S. gold futures for December delivery fell 0.7% to $4,081.30 per ounce.

The U.S. dollar index hovered near a one-week high, making dollar-priced bullion more expensive.

Bullion prices fell 5.3% on Tuesday, after notching a record high of $4,381.21 in the preceding session. Prices have gained 54% so far this year, supported by geopolitical and economic instability, U.S. rate-cut expectations, and robust ETF inflows.

"Strong gains that we saw in recent weeks meant that from a technical perspective, gold prices had entered the overbought territory and this led many traders to close positions in order to lock in profits," said ActivTrades analyst Ricardo Evangelista.

On the technical front, gold is supported by the 21-day moving average at $4,005.

Investors are awaiting the U.S. Consumer Price Index (CPI) report, due on Friday, which could offer insights into the Federal Reserve's trajectory for rate cuts. Gold, a non-yielding asset, tends to benefit in low-interest rate environments.

Reuters