Gold prices slipped on Thursday as Treasury yields rose and as investors booked profits after the metal scaled a two-week high in the previous session on expectations of an interest rate cut by the US Federal Reserve.
gold slipped by 0.2% to $1,423.32 an ounce as of 10:54 a.m. EDt (1454 GMT).
Prices had jumped about 1.5% in the previous session as the dollar slipped after weaker-than-expected U.S. housing data and extended gains early on Thursday to hit $1,428.40, its highest since July 3.
gold futures edged 0.1% higher to $1,424.60 an ounce.
"The anticipation of a rate cut has really driven a lot of the momentum we've seen lately and we see a level of profit taking now," said Jeffrey Sica, founder, president and chief investment officer of SICA Wealth Management LLC.
"We are going to hold steady at $1,400 range. ... If we don't get the rate cut,
gold is going to head back into $1,300."
Increased bets on a Fed rate cut have kept
gold well supported above $1,400 and overall momentum is positive, analysts said.
Interest rate futures traders are pricing in a 65% chance of a 25-basis-point cut this month and a 35% likelihood of a 50-basis-point-cut, according to the CME Group's FedWatch tool. [US/]
Meanwhile, US Treasury yields rose on Thursday after a Philadelphia manufacturing index rebounded strongly in July, adding to recent data that shows an improving US economy.
Investors are also focusing on developments in Sino-US trade talks. US Treasury Secretary Steven Mnuchin said US and Chinese officials will have a phone call later on Thursday that could pave the way for further in-person trade talks.
Among other precious metals, silver rose 0.7% to $16.09 per ounce, surpassing the $16 mark for the first time since February, extending gains for a fifth straight session.
The metal touched its highest since Feb. 20 at $16.17 earlier in the session, while it posted its biggest one-day percentage gain in more than five months on Wednesday.
"Silver is basically playing catchup withSpot platinum was up 0.3% at $845.46, after touching a two-month peak of $852.32. Palladium fell 1.4% to $1,516.19 per ounce, after slipping to its lowest level in more than three weeks at $1,508.50
gold, after the metals had decoupled earlier in the year with silver held back by growth concerns. The gap between the two metals got (to be) too much, and now we are seeing mean reversion in the gold/silver ratio," said Fawad Razaqzada, market analyst with Forex.com.