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Fed delivered its first rate cut since December

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Spot gold hits record peak of $3,707.40 on Wednesday

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Price pull back from record is corrective in nature,

analyst

says

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US weekly jobless claims fall

(Updates for US morning hours)

By Ashitha Shivaprasad

Sept 18 (Reuters) - Gold prices fell on Thursday due to

profit-taking, after scaling a record peak in the previous

session, as markets assessed the Federal Reserve's stance on

further interest rate cuts.

Spot gold was down 0.6% at $3,638.33 per ounce as of

9:41 am EDT (1341 GMT). U.S. gold futures for December

delivery fell 1.3% to $3,670.40.

The previous session saw volatile trading, with spot prices

briefly touching a record high of $3,707.40 before pulling back

from those levels.

On Wednesday, the Fed delivered its first rate cut since

December and opened the door to further easing, but tempered its

message with warnings of sticky inflation, sowing doubt over the

pace of future policy adjustments.

Fed Chair Jerome Powell described the policy move as a

risk-management cut in response to a weakening labor market, but

emphasized that the central bank is not in a hurry to begin

easing.

"There was some confusion around Powell's comment about the

rate cut being a risk-management measure, and that uncertainty

prompted profit-taking," said Peter Grant, vice president and

senior metals strategist at Zaner Metals.

"But, I do think (gold's) long-term bullish trend still

remains and the setback from yesterday's all time high is

corrective in nature... Every time gold make a new high, it just

lends additional credence to the to the $4,000 objective."

Zero-yield gold, which tends to perform well in low-interest

rate environments and during periods of uncertainty, has gained

nearly 39% this year.

Analysts at SP Angel in a note reiterated that the current

primary driver behind gold is the diversification of dollar

reserves by BRIC central banks, most notably China.

"This trend is expected to continue, supporting gold prices

whilst a lower dollar is also expected to provide a sustained

tailwind," the note added.

Elsewhere, data showed the number of Americans filing new

applications for unemployment benefits fell last week.

Among other metals, spot silver fell 0.3% at $41.51

per ounce, platinum gained 0.9% to $1,376, and palladium

was down 1.1% at $1,141.82.