GOLD down more than 2% after hitting an all-time high

Gold prices fell more than 2% after hitting an all-time high as currency futures traders increased bets the US Federal Reserve (FED) would cut interest rates next year.

Gold remains supported by hopes that not only is the tightening cycle by the Fed and other central banks over but also by expectations of interest rate cuts. However, today's drop may reflect that the odds have gone too far on an interest rate cut.

The gold market at the moment seems to reflect a change in sentiment rather than specific fundamentals. There was no specific catalyst that led to the rally to $2,150, and no specific event pushed the price sharply back to $2,000. US bond yields rose but only modestly, and the strong dollar does not explain the volatility.