Gold Pares Losses
Gold traded near $2,230 per ounce on Thursday, rebounding slightly after an earlier retreat from October highs as markets digested the Federal Reserve’s move and its technical liquidity step.
The Fed delivered the expected 25 basis point cut and Chair Powell’s remarks were read as modestly dovish which pushed traders to lift the probability of further easing, yet the policy statement and dot plot left the pace of cuts conditional.
At the same time the Fed announced it will begin buying about $40 billion of short dated Treasury bills to ease money market strains, a measure that should cap upward pressure on short yields and support precious metals.
The dollar weakened to the mid 98s and US 10 year yields eased toward the low 4s which reduced the opportunity cost of holding bullion and helped underpin the rebound.
Geopolitical frictions and ongoing central bank buying, notably further additions to China’s reserves, added structural support for prices.
Source: Tradingeconomics.com
