Gold prices hit an all-time high on Wednesday following the U.S. Federal Reserve’s decision to cut interest rates by 50 basis points.
Price Movements
Spot gold rose by 0.9% to $2,592.39 per ounce at 18:17 GMT. The U.S. central bank initiated what is expected to be a steady easing of monetary policy by reducing borrowing costs by half a percentage point.
Fed’s Future Rate Projections
Policymakers anticipate an additional 0.5% rate cut by the Federal Reserve by the end of the year and a full percentage point reduction by 2025. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold and weaken the U.S. dollar, making gold more affordable for investors holding other currencies.
Impact on the Dollar
The dollar fell by about 0.5% after the Federal Reserve’s decision, reaching its lowest level since July 2023 against a basket of competing currencies.
Other Precious Metals
Silver gained 0.6% in spot trading, following a record high on Monday. Platinum remained steady at $981.10 per ounce, while palladium dropped 3.2% to $1,081 per ounce.
Gold Futures
U.S. gold futures edged up by 0.2%, settling at $2,598.60 per ounce.