Gold prices retreated from record highs during Thursday's Asian trading session as a recent rally in the metal lost momentum. The market's attention remains fixed on potential U.S. interest rate cuts and growing concerns about a possible recession.

Earlier this week, gold reached unprecedented levels as expectations strengthened that the Federal Reserve would begin reducing interest rates in September. However, a combination of profit-taking and a recovery in the dollar led to a decline in gold prices on Thursday.

Spot gold decreased by 0.5% to $2,500.55 per ounce, while December gold futures dropped 0.4% to $2,547.05 per ounce as of 00:15 ET (04:15 GMT). Spot gold had peaked at $2,532.05 per ounce on Wednesday.

The surge in gold prices was driven by the release of the Federal Reserve's late-July meeting minutes, which revealed broad support among policymakers for lower interest rates, given the progress in reducing inflation.

These minutes solidified expectations for a rate cut in September, although traders remain divided on whether the reduction will be 25 or 50 basis points, according to CME FedWatch.

On Wednesday, a sharp downward revision in payroll data for the year through March 2024 reignited fears that a cooling labor market could trigger a U.S. recession.

While recession fears dampened broader risk-taking in financial markets, gold prices still fell amid profit-taking, with the dollar rebounding from recent seven-month lows.

The market now awaits an address by Fed Chair Jerome Powell at the Jackson Hole Symposium on Friday.

Lower interest rates are generally favorable for gold, as they reduce the opportunity cost of holding non-yielding assets. Other precious metals saw slight gains based on this expectation but largely followed gold's lead.

Platinum futures slipped 0.4% to $970.0 per ounce, while silver futures edged down 0.3% to $29.448 per ounce.