Gold Prices Plummet as Investors Take Profits After Record High

Global gold prices fell to their lowest level in more than a week on Tuesday (local time), Wednesday WIB, as investors locked in profits following a record high in the previous session. The decline was driven by ongoing concerns over U.S. President Donald Trump's tariff plans.

According to Yahoo Finance data (Wednesday, February 26, 2025), spot gold prices dropped 1.4% to USD2,909.59 per ounce, hitting their lowest point since February 17 earlier in the session. On Monday, gold had reached a record high of USD2,956.15. Meanwhile, U.S. gold futures closed 1.5% lower at USD2,918.80.

So far this year, gold has set 11 record highs, surpassing the key threshold of USD2,950 per ounce. Meanwhile, Trump reaffirmed that import tariffs on Canada and Mexico would proceed as scheduled, despite the two countries' efforts to strengthen border security and curb fentanyl shipments to the U.S. ahead of the March 4 deadline.

At the same time, gold speculators reduced their net long positions by 13,605 contracts, bringing the total to 201,962 contracts for the week ending February 18.

The Fed Prepares to Respond to Inflation and Labor Market Trends

Meanwhile, investors and economists expect the Federal Reserve (The Fed) to take a strong and systematic approach in responding to shifts in inflation and labor market conditions, according to a study published by the San Francisco Fed on Monday (February 24, 2025).

Higher inflation could force the Fed to maintain high interest rates, diminishing gold's appeal as a safe-haven asset since it does not yield interest.

Market participants are now eagerly awaiting the release of the U.S. Personal Consumption Expenditures (PCE) report on Friday, the Fed’s preferred inflation gauge. The report will provide critical insights into interest rate policy and potential monetary easing.

In addition to gold, other precious metals also experienced declines. Spot silver prices fell 2.3% to USD31.61 per ounce, platinum slid 0.5% to USD962.15, and palladium dropped 1.9% to USD922.39. Notably, platinum and palladium hit their lowest levels since January 30 and January 9, respectively, during early trading.

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