Gold prices retreated on Thursday, edging toward the weekly low of US$2,605 as the U.S. Dollar and Treasury yields paused their declines.
By 2:30 pm AEDT (3:30 am GMT) spot gold fell $5 or 0.2% to US$2,630.36 per ounce.
Meanwhile. the U.S. dollar regained traction following profit-taking earlier this week, supported by a modest rise in Treasury yields. However, uncertainty lingers over President-elect Donald Trump’s proposed tariffs and their impact on economic growth and Federal Reserve interest rate policy.
Traders continue to anticipate a 25-basis-point rate cut by the Federal Reserve in December, with the CME Group's FedWatch Tool reflecting a 70% probability of such a move, up from 62% earlier in the week.
Gold’s losses were compounded by the announcement of a ceasefire between Israel and Hezbollah on Wednesday, which reduced geopolitical risk in the Middle East.
Among data releases, the Fed’s preferred inflation gauge, the core personal consumption expenditures (PCE) price index, rose by 0.3% monthly and 2.8% annually, in line with market expectations.
Looking ahead, gold prices are likely to remain volatile as thin holiday trading conditions amplify market reactions.
