GOLD struggled for momentum on Thursday (Sep 19) as market participants digested Federal Reserve chair Jerome Powell’s comments after the US central bank delivered a super-sized rate cut.
Spot gold was little changed at US$2,558.00 per ounce, as at 0033 GMT. Bullion rose to a record high of US$2,599.92 on Wednesday before closing lower.
US gold futures fell 0.6 per cent to US$2,582.70.
The US dollar rose broadly, recovering from an earlier tumble caused by the Fed’s rate-cut decision. A stronger US dollar makes gold more expensive for other currency holders.
The Fed initiated a gradual easing of monetary policy with a half-percentage-point rate cut on Wednesday, anticipating an additional half-point reduction by the end of the year.
Following the rate-cut decision, Powell said he does not see any indication of a recession or even an economic downturn ahead.
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He said the central bank is in no rush to cut rates and that it will move as fast or as slow as it thinks appropriate.
Traders are currently anticipating a 68 per cent chance of a 25 basis-point (bp) reduction in November and a 32 per cent chance of a 50-bp cut, according to the CME FedWatch tool.
Zero-yield bullion tends to be a preferred investment in a lower interest rate environment and during geopolitical turmoil.
Market focus is also on the initial US jobless claims data, which is due at 1230 GMT.
On the geopolitical front, hand-held radios used by Hezbollah exploded across southern Lebanon on Wednesday, making it the deadliest day since fighting with Israel began nearly a year ago.
Spot silver rose 0.5 per cent to US$30.20 per ounce, platinum edged up 0.1 per cent to US$969.45 and palladium shed nearly 1 per cent to US$1,051.43. REUTERS
