Spot Gold surged on Thursday, snapping a four-day streak of losses, as the Federal Reserve delivered a largely anticipated rate cut.
Market players also weighed US President Trump’s remarks after the US–China summit.
The Federal Reserve lowered its federal funds rate target range by 25 basis points to 3.75%-4.00% at its October meeting, in line with market consensus. This way, borrowing costs were brought to their lowest level since 2022.
Fed policy makers highlighted increasing downside risks to employment in recent months, while inflation has remained elevated.
In regard to future policy path, Fed Chair Jerome Powell said at the regular press conference that a December rate cut was not a foregone conclusion.
On the trade front, US President Trump announced a one-year agreement with China on rare earths and critical minerals and halved fentanyl tariffs to 10%. In turn, Beijing is to curb fentanyl production and resume purchases of US soybeans and other farm goods.
Spot Gold was up 0.97% on the day to trade at $3,968.68 per troy ounce.
“There’s no catalyst for the rally other than a bit of a technical bounce. A lot has gone against gold this week. The looming U.S.-China trade deal diminishes trade and geopolitics as a tailwind,” Capital.com analyst Kyle Rodda was quoted as saying by Reuters.
“The hawkish cut from the Federal Reserve and the drop in the odds for another rate cut in December are also negative for gold. I think gold could keep pulling back given this dynamic. Although, in the long run the trend is to the upside for gold.”
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