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Gold dips after Federal Reserve cuts interest rates - YAHOO FINANCE
Gold (GC=F)
Gold prices retreated on Thursday morning, pulling back from record highs after the US Federal Reserve cut interest rates by a quarter of a percentage point and signalled a measured path of monetary easing for the remainder of the year.
At the time of writing, gold futures (GC=F) dropped 1.1% to $3,676.90 per ounce, while the spot price of gold retreated 0.7% to $3,647.93 a troy ounce, after hitting a record high of $3,707.40 during Wednesday's session.
The Fed reduced rates by 25 basis points on Wednesday to 4%-4.25%. The Federal Open Market Committee projected two further cuts in 2025, but just one in 2026, reinforcing a cautious approach to monetary policy.
Chair Jerome Powell characterised the move as a “risk-management cut” in response to signs of a softening labour market and heightened employment risks.
“We’ll be taking decisions meeting by meeting,” Powell said, hinting that a series of aggressive reductions is not on the table.
Read more: FTSE 100 LIVE: Stocks rise as Bank of England expected to leave UK interest rates on hold
The Fed’s measured tone prompted some investors to lock in profits following gold’s (GC=F) recent surge.
"The Fed is signalling uncertainty with Powell calling this a 'risk-management' cut which has triggered some quite understandable profit-taking," Tai Wong, an independent metals trader, told Reuters.
"A retracement or at least a consolidation is healthy; I don't expect an unusually deep pullback. Unless we get below major technical support at $3,550, the short-term uptrend should remain intact," he added.
