Gold Prices Dip Amid Federal Reserve Uncertainty, Silver Reaches Record Highs
Gold prices experienced a slight decline during Thursday's trading, moving away from their highest levels in about a week. This drop followed the Federal Reserve's (the U.S. central bank) decision to lower interest rates on Wednesday, amid a notable division among policymakers that has created confusion among investors regarding the expected pace of monetary easing in the coming year.
Spot gold fell by 0.2% to $4,221.49 per ounce at 03:00 GMT, after earlier reaching its highest level since December 5. Meanwhile, U.S. gold futures for February delivery rose by 0.6%, reaching $4,249.70 per ounce.
Tim Waterer, chief market analyst at KCM Trade, commented on the performance, stating: "Gold was unable to advance following today's events... as the Federal Reserve made it clear that any further rate cuts will be limited and spaced out."
This minor decline follows the Federal Reserve's decision to cut interest rates by 25 basis points in a vote that revealed significant division, with six board members opposing the decision in an unprecedented move. The accompanying statement indicated that borrowing costs would not see further cuts until clearer signs of a slowdown in the labor market and a decrease in inflation, which was described as "still relatively high," emerge. Additionally, Fed Chair Jerome Powell avoided providing hints about the timing of the next rate cut.
In a related context, silver continues to shine, reaching new record levels. Spot silver rose by 0.8% to $62.25 per ounce, after previously hitting a record high of $62.88 earlier in the session. This brings the white metal's gains to 113% since the beginning of the year, driven by strong industrial demand, declining inventories, and its designation as a critical metal in the United States.
Regarding silver's performance, Ilia Spivak, head of global economics at Tasty Live, remarked: "Silver has not paid much attention to external factors and has been rising independently... and I see no signs of it falling."
In terms of other precious metals, platinum rose by 0.3% to $1,660.50 per ounce, while palladium fell by 0.2% to $1,479.70 per ounce.
The market is now awaiting employment and inflation data from the United States for November, which will be released next week, followed by a detailed report on third-quarter economic growth, expected to provide crucial indicators for future monetary policy expectations and movements in the precious metals markets.
