Gold's record run pauses as investors book profits

Gold prices inched lower on October 21, as investors booked profits after bullion hit a fresh high in the previous session on hopes of further interest rate cuts from the US Federal Reserve and strong safe-haven demand.

Spot gold was down 0.3% at $4,340.29 per ounce, as of 0248 GMT, having hit an all-time high of $4,381.21 on October 20. US gold futures for December delivery eased 0.1% to $4,356.40 per ounce.

"Profit-taking moves and an abating of safe-haven flows combined to just take the edge off the gold price today... any pullbacks on gold

will be viewed as buying opportunities whilst the Fed remains on their current rate-cutting trajectory," said KCM Trade Chief Market Analyst Tim Waterer.

Markets are fully pricing in for a quarter-point Fed rate cut this month, and another one in December, according to the CME FedWatch Tool. Gold, a non-yielding asset, tends to do well in a low interest rate environment.

"The current gold rally has further room to run on the topside provided that US CPI data later this week doesn't produce any nasty upside surprises," Waterer said.

The data, scheduled for release on October 24, after a delay due to the government shutdown, is expected to show that the index rose 3.1% on a year-over-year basis in September, according to economists polled by Reuters.

The US government shutdown stretched to its 20th day on October 20, after senators failed for the tenth time last week to break the impasse. White House economic adviser Kevin Hassett said on Monday the shutdown was likely to end this week.

The shutdown has delayed key economic data releases, leaving investors and policymakers in a data-vacuum ahead of the Fed's policy meeting next week.

On the trade front, US Treasury Secretary Scott Bessent is expected to meet Chinese Vice Premier He Lifeng in Malaysia this week to try to forestall an escalation of US tariffs on Chinese goods.

Elsewhere, spot silver dipped 1.6% to $51.64 per ounce, platinum slipped 0.7% to $1,627.62 and palladium gained 0.5% to $1,503.17.