Gold prices retreat from all-time high

After a rip-roaring rally to fresh record highs, gold price slipped back on Tuesday to trade at $2,206.

The prospect of an end to the tightening cycle – and even rate cuts – has fuelled a rally in the precious metal.

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Recent statements from Fed Chair Jay Powell hint at US monetary policy being “well into restrictive territory,” fueling speculation that the Fed might initiate interest rate cuts in early 2024.

Earlier this week, spot gold prices surged to new highs at US$2,140 per ounce amid growing anticipation of a shift towards looser monetary policy in the United States, though much of these gains were later retraced.

Other crucial precious metals, namely silver, platinum, and palladium, all experienced a similar trend in November–beginning of December (though platinum and palladium generally tend to experience less intense spikes).

According to analysts, the upward trend in the precious metals market will continue with a backdrop of potentially easier monetary policy.

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Gold, specifically the most popular one of all, has made a series of record high 2020–23. And macroeconomic instability is to blame.

There are wars raging in some parts of the world heighten demand for safe havens.

But “gold is an inherent store of value,” said Precious Metals division director at the Royal Mint Andrew Dickey to UK Investor Magazine. “It has always been seen by investors as a safe haven and a hedge against macroeconomic instability”, he added.

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