Fed Rate Slash Fails to Spark Gold Rally

19 Sep 2024 , 09:07 AM

On Thursday, gold failed to gain momentum as market participants absorbed Federal Reserve Chair Jerome Powell’s remarks following a significant rate cut by the US central bank.

The spot gold price remained barely changed at $2,558.00 per ounce. Bullion reached a record high of $2,599.92 on Wednesday before falling.

US gold futures down 0.6% to $2,582.70.

The US dollar climbed broadly, recovering from an earlier decline prompted by the Fed’s rate-cutting decision. A higher dollar increases the price of gold for other currency holders.

The Fed began a gradual easing of monetary policy with a half-point rate cut on Wednesday, with another half-point reduction expected by the end of the year.

Following the rate-cut decision, Powell stated that he sees no signs of a recession or even an economic slump coming.

He stated that the central bank is not in a haste to decrease interest rates and will proceed at its own pace.

According to the CME FedWatch tool, traders expect a 68% chance of a 25 basis-point decrease in November and a 32% possibility of a 50-bp cut.

Zero-yield bullion is a popular investment in low-interest-rate environments and during geopolitical turbulence.

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