WASHINGTON: Gold prices eased on Thursday as the dollar gained strength in the wake of the US Federal Reserve’s latest rate decision.
Spot gold slipped 0.2 percent to $3,654.29 per ounce in early Asian trade, retreating from Wednesday’s record peak of $3,707.40. US gold futures for December delivery also lost ground, falling 0.8 percent to $3,690.
Dollar gains weigh on bullion
The modest decline came after the Fed trimmed interest rates by a quarter of a percentage point, a move that had been widely expected. While investors had hoped for stronger signals of aggressive easing, the central bank took a more cautious stance.
“The general message from the Fed was slightly hawkish,” said Edward Meir, analyst at Marex. “They didn’t really throw their full weight behind lower rates. The dollar firmed up after the meeting and Treasury yields also pushed higher. In the near term, gold looks a little overbought and could retrace closer to the $3,600 mark.”
A stronger dollar makes gold more expensive for investors holding other currencies. On Thursday, the dollar index rose 0.2 percent, extending its recent gains.
Fed outlook and investor sentiment
Fed Chair Jerome Powell described the rate cut as a “risk-management” move, pointing to concerns about a cooling labour market. He also stressed that the central bank will continue to assess its policy on a “meeting-by-meeting” basis rather than commit to a fixed path of easing.
The Fed’s cautious tone has kept some investors on edge. Despite bullion’s recent surge, demand signals remain mixed. The SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported its holdings dipped 0.44 percent to 975.66 tonnes on Wednesday from 979.95 tonnes the day before.
A year of strong gains
Gold has still enjoyed an extraordinary rally in 2025, rising 39 percent so far after a 27 percent climb last year. Analysts point to expectations of further monetary policy easing, ongoing geopolitical tensions and steady central bank buying as the main drivers behind the precious metal’s run.
Other metals were more mixed. Spot silver eased 0.3 percent to $41.53 per ounce, while platinum edged up 0.4 percent to $1,366.75. Palladium held steady at $1,153.87.
For now, gold traders are watching whether the dollar’s momentum will cap further gains or if renewed uncertainty can push bullion back towards fresh highs.
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