Gold pauses for breath after record run on safe-haven demand

(Reuters) - Gold prices eased on Thursday after hitting a record high earlier in the session, but retained a bullish outlook driven by potential rate cuts signalled by the Federal Reserve and continuing geopolitical and economic uncertainties.

Spot gold was down 0.3% at $3,038.50 an ounce by 11:38 a.m. ET (1538 GMT) due to profit-taking, after hitting a record high of $3,057.21.

U.S. gold futures gained 0.2% to $3,046.60.

"Speculators are trying to take advantage of the market and take some profit off the table ... I think anytime gold sets a high, we see a little bit of resistance," said Alex Ebkarian, chief operating officer at Allegiance Gold.

"Gold is not even acting as a safe-haven asset yet to retail investors because technically we're not in a recession. We are seeing the slowdown in the economy and that could very well create a further uncertainty and more desire for safe-haven assets."

Federal Reserve Chair Jerome Powell said on Wednesday that Trump's initial policies, including extensive import tariffs, may have slowed U.S. economic growth and increased inflation.

Trump, meanwhile, criticized the Fed's decision to hold rates, despite projections for two quarter-percentage-point rate cuts by year-end due to weakening economic growth and higher inflation.

Traders are pricing in 69 basis points of easing this year from the Fed - at least two rate reductions of 25 bps each, with a cut in July fully priced in - LSEG data showed.

"In our bull case, we see gold prices reaching $3,500 per ounce by year-end, underpinned by much higher hedging/investment demand on fears of US hard landing/stagflation," analysts at Citi said in a note.

Gold acts as a hedge against uncertainty and tends to do well in a low-interest-rate environment.

Spot silver fell 1.2% to $33.38 an ounce, platinum fell 1.1% to $982.17. Palladium slipped 1.4% to $945.0.

(Reporting by Anmol Choubey in Bengaluru; Editing by Kirsten Donovan and Editing by Kevin Liffey)