Gold retreats as investors book profits following record rally

Gold prices edged lower on Friday as investors locked in profits after the Middle East tensions and US election jitters sent bullion on a record-breaking rally, while palladium prices extended gains to 10-month highs.

Spot gold eased 0.1% to $2,734.25 per ounce by 10:05 a.m. ET (1405 GMT). Prices had hit an all-time high of $2,758.37 on Wednesday and were on track for a third straight weekly gain.

US gold futures were steady at $2,748.90.

“In the last couple of weeks we had many all-time highs for gold, and it’s reasonable to have a little bit of profit taking and just a slow down in the momentum,” said Alex Ebkarian, chief operating officer at Allegiance Gold.

Non-yielding gold has risen over 32% so far this year as a half-point basis cut by the Federal Reserve bolstered prices, along with safe-haven demand stemming from ongoing tensions in the Middle East.

Uncertainty around U.S. presidential elections also boosted bullion demand as opinion polls show the race to the White House remains tight.

Gold has rallied despite gains in the U.S. dollar, which is set for its fourth weekly rise on increasing odds of Republican former President Donald Trump winning.

Gold prices have slipped back into anti-traditional-driver mode in recent weeks, seemingly caught up in a wider “Trump trade,” Capital Economics said in a note.

“One can – and plenty surely will – make logical cases for gold prices to rise further from here. But we would stress that gold is not a one-way bet,” Capital Economics said as they see a good chance of a sizeable price correction.

Spot palladium hit a ten-month high for the second consecutive day, amid concerns about exports from Russia. It was last up 4.2% at $1,205.25.

Palladium rose 9% on Thursday after Bloomberg News reported that the U.S. asked the Group of Seven allies to consider sanctions on Russian palladium and titanium, which triggered coverage of some short positions in palladium futures.

Spot silver , which hit a 12-year-high of $34.87 earlier this week, was steady at $33.78 per ounce. Platinum lost 0.2% to $1,023.90.