June 26 (Reuters) – Gold prices fell more than 1% on Wednesday, retreating from a 6-year peak scaled in the previous session, on signs the U.S. Federal Reserve will not resort to aggressive interest rate cuts in July.
Spot gold was down 1.2% at $1,405.44 per ounce as of 1108 GMT, snapping a six-session winning streak that lifted it to $1,438.63 on Tuesday, the highest since May 14, 2013. U.S. gold futures fell 0.7% to $1,409.10.
Fed Chairman Jerome Powell stressed the central bank’s independence from U.S. President Donald Trump, who is pushing for rate cuts. St. Louis Fed President James Bullard, considered one of the most dovish U.S. central bankers, surprised some investors by saying a 50-basis-point cut in rates “would be overdone”.
“We have had quite a move higher in gold. There is an element of profit taking and the catalyst for that (were) the comments from the Fed yesterday,” ING analyst Warren Patterson said.
“Perhaps, the markets got ahead of itself over the outlook for rate cuts this year, which had driven gold higher. The realisation that we are not going to see as many cuts as we were anticipating is weighing on gold at the moment.”
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