Spot Gold extended a string of losses on Thursday on the back of a firmer US Dollar, following a measured interest rate cut by the Federal Reserve.
The Fed lowered its federal funds rate target range by 25 basis points to 4.00%-4.25% at its September meeting, in line with market consensus.
The central bank also indicated another 50 basis points of rate cuts by the end of the year.
Fed Chair Jerome Powell described the September policy action as a risk-management cut addressing the weakening labor market. the central bank was in a “meeting-by-meeting situation” in regard to the rate outlook.
“The general message from the Fed was slightly to the hawkish side on interest rates, they didn’t really enthusiastically endorse lower rates,” Marex analyst Edward Meir was quoted as saying by Reuters.
“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 US Dollar Index was last up 0.21% to 97.218. A firmer dollar makes dollar-priced Gold less appealing to international investors holding other currencies.
Spot Gold was last down 0.63% on the day to trade at $3,636.88 per troy ounce.
Yesterday the yellow metal registered a new record high of $3,707.40/oz.
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