With a cooling labour market and strong economic growth, the Federal Reserve’s much-awaited quarter-point rate decrease helped gold prices continue their advances on Friday.
Spot gold was up 0.1% to $2,708.89 an ounce, but it had lost about 1% of its value this week.
At $2,716.4, U.S. gold futures increased by 0.4%.
Taking note of a “generally eased” labour market, the U.S. central bank cut the benchmark overnight interest rate to the 4.50%-4.75% range Thursday at the conclusion of its two-day policy meeting.
Gold prices recovered losses following Donald Trump’s victory in the U.S. presidential election, rising more than 1% in the previous session.
Bullion tends to flourish in an atmosphere with low interest rates and is regarded as a hedge against economic risks.
As inflation approaches the 2% target and tight monetary policy is reevaluated, Fed Chair Jerome Powell stated that the central bank will review data to modify the “pace and destination” of rates.
In the meantime, figures released Thursday revealed that Americans’ new unemployment benefit applications increased marginally over the previous week, suggesting little shift in the labour market and bolstering the idea that October job growth was hampered by hurricanes and strikes.
According to traders, there is now a 74% possibility that rates will drop by 25 basis points in December, which could be the third rate cut this year.
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