Gold prices headed slightly lower Thursday morning, retreating from a record rally that has seen the precious metal notch nine consecutive days of gains.
Bullion prices were supported Wednesday following the Federal Reserve signaling that it planned to keep the low interest rate environment in place for the foreseeable future as the U.S. economy recovers from COVID-19. Benchmark federal-funds futures rates stand at a range between 0% and 0.25%.
“The market has arguably overextended itself in the short term and gold is clearly overbought,” wrote Ross Norman, CEO at MetalsDaily.com, in a daily note.
“It is due a period of consolidation which would confer longer term strength in the price. That is assuming gold behaves in its normal, rational and sober manner,” he wrote.
August gold GC00, -0.45% GCQ20, -0.45% was trading $7, or 0.4%, lower at $1,946.20 an ounce, after settling at a record on Wednesday, marking its ninth straight advance, which is its longest win streak since a 10-session climb ended in January.
However, global gold demand declined in the second quarter and first half of this year overall, but demand for gold as an investment climbed to a record as exchange-traded-fund holdings reached an all-time high by the end of June, according to a report from the World Gold Council published Thursday.
Meanwhile, September silver SIU20, -4.11% tumbled 89 cents, or 3.9%, at $$23.425 an ounce, following a less than 0.1% gain on Wednesday.
Looking forward, commodity traders are awaiting important data on jobs and the U.S. economy’s GDP that could influence gold prices on Thursday.
Economists polled by MarketWatch estimate gross domestic product contracted at a record 34.6% annual pace from the start of April to the end of June. In Europe, Germany reported its worst decline in GDP since 1970, with the eurozone’s top economy falling 10.1% quarter-on-quarter.
Separately, first-time claims for unemployment benefits last week are expected to rise to 1.51 million from 1.42 million the previous week.