Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
Investing.com-- Gold prices traded in tight ranges Thursday, slipping from record highs in the wake of the Federal Reserve lowering interest rates and signaling a measured approach to further policy easing.
At 08:55 ET (12:55 GMT), spot gold rose 0.2% to $3,666.55 an ounce, consolidating after a near 1% loss from the previous session, where it reached a fresh record high of $3,707.40/oz. U.S. Gold Futures for December delivery dropped 0.5% to $3,700.60 an ounce.
Fed lowers rates by 25 bps
The Fed lowered its benchmark rate by 25 basis points to a range of 4.00% to 4.25% on Wednesday, its first cut since December. Policymakers projected two additional cuts this year, but only one in 2026, underscoring a cautious stance.
Chair Jerome Powell said the reduction was a “risk-management cut” in response to softening labor market conditions and elevated employment risks.
He stressed that decisions would now be taken on a meeting-by-meeting basis, a signal that aggressive easing was unlikely.
“They think three more cuts will be enough to boost growth and prompt a revival in the jobs market, but the market is sceptical,” ING analysts said.
The US Dollar Index rose 0.3% on Thursday, recovering from a 3-1/2 year low hit in the last session, making bullion more expensive for holders of other currencies.
Gold has gained nearly 39% so far this year, driven by expectations of monetary easing, geopolitical uncertainty and strong central bank purchases.
The Fed’s cautious tone, however, prompted some investors to take profits after bullion’s surge to record highs.
Metal markets mixed
Silver Futures rose 0.1% to $42.167 per ounce, while Platinum Futures gained 2.2% to $1,410.35/oz.
Benchmark Copper Futures on the London Metal Exchange slipped 0.4% to $9,953.20 a ton, while U.S. Copper Futures also declined 0.6% to $4.6055 a pound.
The latest numbers from the National Bureau of Statistics show that China’s refined copper output rose 15% year-on-year to 1.3 million tonnes in August, primarily driven by stronger ore purchases.
Copper inventories at U.S. warehouses tracked by the LME rose for the first time since December 2023, up by 175 tonnes.
"In the first half of the year, inventories were moved to the U.S. from LME and SHFE warehouses, largely driven by U.S. prices trading above the benchmark LME prices. The divergence came as the U.S. announced a 50% tariff on copper imports. However, the tariff was later only applied to semifinished copper products; refined and concentrate imports were exempted. As a result, Comex prices returned largely in line with the LME prices," ING added.
Ayushman Ojha contributed to this article