Gold prices slipped on Tuesday, as the dollar rose and investors booked profits after bullion hit a fresh high in the previous session on hopes of further interest rate cuts from the U.S. Federal Reserve and strong safe-haven demand.
Spot gold was down 0.7% at $4,323.69 per ounce, as of 0634 GMT, having hit an all-time high of $4,381.21 on Monday. U.S. gold futures for December delivery fell 0.4% to $4,340.10 per ounce.
The dollar index rose 0.2% against its rivals, making gold more expensive for other currency holders.
"Profit-taking moves and an abating of safe-haven flows combined to just take the edge off the gold price today... any pullbacks on gold will be viewed as buying opportunities whilst the Fed remains on their current rate-cutting trajectory," said KCM Trade Chief Market Analyst Tim Waterer.
Markets are fully pricing in for a quarter-point Fed rate cut this month, and another one in December, according to the CME FedWatch Tool. Gold, a non-yielding asset, tends to do well in a low interest rate environment.
"The current gold rally has further room to run on the topside provided that U.S. CPI data later this week doesn't produce any nasty upside surprises," Waterer said.
The data, scheduled for release on Friday after a delay due to the government shutdown, is expected to show the index rose 3.1% on a year-over-year basis in September, according to economists polled by Reuters.
The U.S. government shutdown stretched to its 20th day on Monday, after senators failed for the tenth time last week to break the impasse. White House economic adviser Kevin Hassett said on Monday the shutdown was likely to end this week.
The shutdown has delayed key economic data releases, leaving investors and policymakers in a data-vacuum ahead of the Fed's policy meeting next week.
On the trade front, U.S. Treasury Secretary Scott Bessent is expected to meet Chinese Vice Premier He Lifeng in Malaysia this week to try to forestall an escalation of U.S. tariffs on Chinese goods.
Spot silver dipped 1.8% to $51.54 per ounce, platinum slipped 1.8% to $1,608.35 and palladium lost 0.9% to $1,483.14. - Reuters
