Gold prices retreated in Thursday’s Asian session, stepping back from recent record levels as the U.S. dollar strengthened following the Federal Reserve’s widely anticipated interest rate cut and its cautious outlook for future policy moves.
Spot gold dropped 0.7% to $3,635.55 per ounce by 02:24 ET (06:24 GMT), extending losses of nearly 1% from the previous session when prices hit a record $3,707.40 per ounce. U.S. December gold futures also fell 1.3%, settling at $3,670.45.
Fed Reduces Rates by 25 Basis Points, Signals Gradual Approach
On Wednesday, the Fed lowered its key interest rate by 25 basis points to a 4.00%–4.25% range, its first cut since December. Officials projected two more cuts this year, but only a single reduction in 2026, reflecting a measured approach.
Chair Jerome Powell described the decision as a “risk-management cut”, citing softer labor market conditions and elevated employment risks. He noted that policy moves would now be decided on a meeting-by-meeting basis, suggesting that aggressive easing is unlikely.
ING analysts said: “They think three more cuts will be enough to boost growth and prompt a revival in the jobs market, but the market is sceptical.”
The U.S. Dollar Index rose 0.4% on Thursday, bouncing back from a 3½-year low reached in the previous session, which made gold relatively more expensive for investors using other currencies.
Gold has gained nearly 39% this year, supported by expectations of monetary easing, geopolitical tensions, and strong central bank purchases. Nevertheless, the Fed’s cautious tone prompted some investors to book profits after the metal’s record run.
Other Metals Face Pressure from Stronger Dollar
The rebound in the dollar also pressured other metals on Wednesday.
Silver futures slid 1.1% to $41.72 an ounce, while platinum futures remained relatively flat at $1,370.80 per ounce. Copper futures on the London Metal Exchange fell 0.5% to $9,945.80 per ton, with U.S. copper futures also down 0.5% to $4.60 per pound.
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