Gold eases as dollar firms after Fed meeting, Powell comments

Gold prices extended losses on Thursday as the dollar firmed after the US Federal Reserve cut interest rates by a quarter of a percentage point, as expected, and adopted a measured rhetoric on further policy easing.

Spot gold dipped 0.2% to $3,654.29 per ounce, as of 0156 GMT, after hitting a record high of $3,707.40 on Wednesday.

US gold futures for December delivery slipped 0.8% to $3,690.

“The general message from the Fed was slightly to the hawkish side on interest rates, they didn’t really enthusiastically endorse lower rates,” said Marex analyst Edward Meir.

“As a result, we saw the dollar firm up after the Fed meeting and the Treasury rates also moved higher… I think over the short term, we are probably a little bit overbought here and we could retrace a bit further maybe to the $3,600 mark.”

The dollar rose 0.2% to extend gains against its rivals, making gold more expensive for other currency holders.

The Fed reduced rates by 25 basis points on Wednesday and indicated it will steadily lower borrowing costs for the rest of this year.

Fed Chair Jerome Powell characterised the policy action as a risk-management cut in response to the weakening labour market and the central bank is in a “meeting-by-meeting situation” regarding the outlook for interest rates.

Meanwhile, SPDR Gold Trust , the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.44% to 975.66 tonnes on Wednesday from 979.95 tonnes on Tuesday.

Gold prices have risen 39% so far this year, following 27% gains in 2024, helped by expectations for monetary policy easing by the Fed, lingering geopolitical tensions and strong central bank buying.

Elsewhere, spot silver eased 0.3% to $41.53 per ounce, platinum gained 0.4% to $1,366.75 and palladium was steady at $1,153.87.