Gold Prices Dip as Federal Reserve Signals Caution; Silver Hits Record Highs
Gold prices saw a minor decline during trading on Thursday, retreating from their highest levels in almost a week. This shift followed the Federal Reserve's decision to lower interest rates on Wednesday, which has left investors uncertain about the future direction of monetary policy due to a split among policymakers.
In spot trading, gold decreased by 0.2% to $4,221.49 per ounce at 03:00 GMT, after earlier reaching its highest point since December 5. Meanwhile, U.S. gold futures for February delivery rose by 0.6% to $4,249.70 per ounce.
Tim Waterer, chief market analyst at KCM Trade, stated, "Gold has struggled to make gains following today’s events, as the Fed indicated that any further interest rate cuts will be limited and gradual."
This modest decline follows the Federal Reserve's decision to cut interest rates by 25 basis points, a move that saw significant opposition from six Board members—a rare occurrence. The Fed's accompanying statement noted that additional cuts would not occur until there are clearer signs of a slowdown in the labor market and a reduction in inflation, which remains "somewhat high." Furthermore, Fed Chair Jerome Powell did not provide any insights regarding the timing of future rate cuts.
In contrast, silver has been performing exceptionally well, achieving new record highs. The metal rose by 0.8% to $62.25 per ounce in spot transactions, after reaching a peak of $62.88 earlier in the session. Since the beginning of the year, silver's gains have totaled 113%, bolstered by robust industrial demand, dwindling inventories, and its designation as a critical mineral in the United States.
Ilia Spivak, head of global macroeconomic analysis at Tasty Live, remarked, "Silver has largely ignored external factors and continues to rise independently; I see no signs of a downturn."
Other precious metals also saw activity, with platinum increasing by 0.3% to $1,660.50 per ounce, while palladium dropped by 0.2% to $1,479.70 per ounce.
The market is now anticipating U.S. jobs and inflation data for November, set to be released next week, along with a comprehensive report on economic growth for the third quarter. These reports are expected to provide crucial insights into future monetary policy and the movements of precious metals markets.
