Gold rises to a new high as the Fed announces two rate cuts in 2025
Gold prices remained stable on Thursday after reaching a new high earlier in the session, fueled by the Federal Reserve’s suggestion that the potential interest rate would decrease later this year and geopolitical and economic uncertainties, which fueled safe-haven demand for the metal.
Spot gold remained steady at $3,044.44 per ounce after reaching a record high of $3,057.21 earlier in the session. US gold futures rose 0.3% to $3,050.90. “The U.S. dollar index is rising, putting pressure on precious metal prices,” Quantitative Commodity Research analyst Peter Fertig said. However, he said that with the assistance of persistent geopolitical events and strong central bank demand, gold might continue to rise. The US currency rose 0.3%, making bullion more costly for international purchasers.
Trump’s tariffs are primarily regarded as inflationary, prompting gold to set 16 new highs this year, four above the $3,000 mark. Meanwhile, the Fed maintained its benchmark interest rate steady on Wednesday, although rate decreases are still expected by the end of the year.
“The stage appears set for gold to continue rising, but the market may run out of short-term catalysts as traders price in the new post-FOMC consensus,” said Ilya Spivak, head of global macro at Tastylive. Traders are pricing in 66 basis points of Fed easing this year or around two 25-basis-point rate cuts, with a July decrease entirely priced in, according to LSEG data. Gold is a buffer against uncertainty and performs well in a low-interest rate environment.
“In recent months, investor demand for gold has increased due to the uncertain economic and geopolitical environment… According to an ANZ report issued on Thursday, if current demand growth fades, the market will be exposed to downside risk. Spot silver declined 0.7% to $33.58 per ounce, while platinum dropped 0.3% to $990.20. Palladium fell 0.4 percent to $954.38. “Gold remains firmly bullish, with a potential resistance at the psychological $3,100 level… weakness below $3,030 may trigger a decline lower,” said Lukman Otunuga, senior research analyst at FXTM.
