Gold prices gave up their gains during trading on Thursday, September 19, after jumping to an all-time high yesterday, Wednesday, following the US Federal Reserve’s decision to cut interest rates for the first time in 4 years by 50 basis points.
The Federal Reserve began its easing cycle yesterday with a larger-than-usual half-percentage-point cut. Fed Chairman Jerome Powell said the move was aimed at demonstrating policymakers’ commitment to keeping unemployment low after inflation eased.
But Powell said the economy remains strong, with many labor market indicators, such as jobless claims and even the current unemployment rate of 4.2%, not reaching worrying levels.
According to the CME Group's FedWatch tool, traders currently see a 70% chance of a 25 basis point rate cut at the Fed's November meeting, and a 30% chance of a 50 basis point rate cut.
In terms of trading, December gold futures fell by about 0.2% to $2,592.7 per ounce.
The non-yielding yellow metal tends to be a preferred investment during low interest rates and geopolitical turmoil.
On the geopolitical front, handheld radios used by the Lebanese militant group Hezbollah exploded again on Wednesday, fueling concerns about a wider regional conflict.
For the first time since 2020, the US Federal Reserve cuts interest rates by 50 basis points to a range of 5% - 4.75%
