Spot Gold was on course for its fifth straight weekly advance following a measured interest rate cut by the Federal Reserve and as the central bank signaled a gradual easing path by year-end.
The Fed lowered its federal funds rate target range by 25 basis points to 4.00%-4.25% at its September meeting and 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. Powell also noted the central bank was in a “meeting-by-meeting situation” in regard to the rate outlook.
Markets are now pricing in about a 92% chance of another 25 basis point Fed rate cut in October.
Lower interest rates tend to reduce the opportunity cost of holding Gold, which pays no interest.
“Sentiment is still bullish but has definitely cooled off a bit. Basically, the Fed didn’t really deliver with the dovish guidance needed for gold to push higher,” Capital.com analyst Kyle Rodda was quoted as saying by Reuters.
“The projection of two more cuts this year was a positive. However, the forecast of only the one cut in 2026 was above market pricing and has had the effect of pushing up yields and the dollar.”
Spot Gold was last up 0.16% on the day to trade at $3,650.06 per troy ounce.
The yellow metal registered a new record high of $3,707.40/oz. on Wednesday.
The precious metal has risen 0.20% so far this week.
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