Gold prices fell in Asian trading on Thursday, pulling back from record highs as the U.S. dollar regained strength following the Federal Reserve’s interest rate cut and cautious signals regarding future monetary easing.
Spot gold declined 0.7% to $3,635.55 an ounce by 02:24 ET (06:24 GMT), extending a nearly 1% loss from the previous session, during which it reached a new all-time high of $3,707.40 per ounce. Meanwhile, U.S. gold futures for December delivery slipped 1.3% to $3,670.45.
Fed Cuts Rates by 25 Basis Points, Signals Cautious Approach
The Fed lowered its benchmark rate by 25 basis points to a range of 4.00%–4.25% on Wednesday, marking its first reduction since December. Policymakers forecasted two additional cuts this year, with only one expected in 2026, reflecting a measured stance.
Chair Jerome Powell described the move as a “risk-management cut” in response to softening labor market conditions and heightened employment risks. He emphasized that policy decisions would now be made on a meeting-by-meeting basis, suggesting that aggressive easing is unlikely.
ING analysts commented: “They think three more cuts will be enough to boost growth and prompt a revival in the jobs market, but the market is sceptical.”
The U.S. Dollar Index rose 0.4% on Thursday, recovering from a 3½-year low reached in the previous session, which made gold more expensive for investors holding other currencies.
Gold has surged nearly 39% so far this year, fueled by expectations of monetary easing, geopolitical uncertainties, and strong central bank buying. However, the Fed’s cautious tone encouraged some investors to take profits following bullion’s record-setting rally.
Other Metals Follow Dollar Strength
The strengthening dollar also weighed on other precious and industrial metals on Wednesday.
Silver futures fell 1.1% to $41.72 an ounce, while platinum futures were largely unchanged at $1,370.80 per ounce.
Benchmark copper futures on the London Metal Exchange decreased 0.5% to $9,945.80 per ton, with U.S. copper futures similarly down 0.5% to $4.60 per pound.
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