Gold erases gains at close despite US dollar decline

Gold bars

Gold prices erased their gains at settlement today, Sept. 16, after touching a record peak, despite expectations of a US interest rate cut this week and a weaker US dollar.

Bullion for December delivery finished at $2,608.90 per ounce, after touching $2,617.40 earlier in the session — an all-time high.

Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, dropped 0.35% to 100.76 points at 10:02 pm Makkah time.

Precious metal contracts closed above $2,600 for the first time at the end of Friday's trading, notching a record level and strong weekly gains, as investors await a US interest rate cut.

All eyes are on the Federal Reserve's decision this week, which is widely expected to start easing monetary policy. According to the CME FedWatch Tool, investors are pricing in a 61% and 39% chance of a 50- and 25-basis-point (bp) reduction in borrowing costs, respectively.