Gold prices fell in Asian trading on Friday, slipping below US$4,350 an ounce as profit-taking weighed on the market.
By 3:50 pm AEDT (4:50 am GMT), spot gold prices were down 0.3% to US$4,321.82 per ounce, trading slightly below all-time highs of $4,380.99 per ounce.
The pullback came despite a softer-than-expected U.S. inflation reading for November, which has strengthened expectations that the Federal Reserve could deliver further interest rate cuts.
Lower borrowing costs typically support gold by reducing the opportunity cost of holding the non-yielding precious metal.
While prices lost momentum in the near term, analysts said downside risks may be limited as markets continue to price in a more accommodative Fed stance.
Cooling inflation has reinforced the view that U.S. monetary policy could ease further, lending underlying support to bullion.
ANZ analysts commented in a note to clients: “A fall in yields also supported the precious metal. Meanwhile, rising geopolitical tensions appear to have enhanced gold’s appeal.”
Tensions between the United States and Venezuela, alongside robust industrial and investment demand, are underpinning gold’s appeal as a safe-haven asset.
Looking ahead, traders are expected to take direction from the University of Michigan consumer sentiment index for December, due later on Friday, which could provide further insight into the outlook for U.S. consumer confidence and inflation expectations.
