Gold experienced a decline on Thursday, as investors took profits following the previous day’s surge, which saw bullion surpass the significant $4,000-per-ounce threshold, reaching an all-time high amid economic and geopolitical uncertainties, alongside expectations for further U.S. interest rate reductions. Spot gold decreased by 0.4% to $4,021.99 per ounce as of 0117, following a record high of $4,059.05 reached on Wednesday. U.S. gold futures for December delivery experienced a decline of 0.7%, settling at $4,042.60.

Federal Reserve officials acknowledged that the risks to the U.S. job market had increased sufficiently to justify a rate cut, yet they maintained a cautious stance due to ongoing inflation and discussions regarding the impact of borrowing costs on the economy, as indicated in the minutes from the September 16-17 meeting released on Wednesday. Market expectations indicate a further reduction of 25 basis points in both October and December, with probabilities standing at 95% and 83%, respectively, according to the sources. Non-yielding gold flourishes in an environment characterized by low interest rates and periods of economic uncertainty. This week, markets have contended with political instability in Japan and France, compounded by a persistent U.S. government shutdown.

These factors have contributed to a lack of investor confidence, prompting many to seek refuge in gold. Gold has risen 54% year-to-date, driven by robust central bank purchases, heightened demand for gold-backed Exchange-Traded Funds (ETFs), a depreciating dollar, and increasing interest from retail investors looking for a hedge in the face of escalating trade and geopolitical tensions.

SPDR Gold Trust, the world’s largest gold-backed ETF, reported an increase in its holdings by 0.14%, reaching 1,014.58 tonnes on Wednesday, up from 1,013.15 tonnes on Tuesday. Elsewhere, spot silver increased by 0.1% to $48.91 per ounce, following its peak at $49.57 on Wednesday, marking an all-time high. Platinum experienced a decline of 0.7%, settling at $1,650.60, while palladium saw a decrease of 1%, reaching $1,435.25. Oil prices decline as Gaza plan emerges, diminishing the Middle East risk premium.