Gold Steady Near Record High After Federal Reserve Holds Rates
Gold steadied just below a record high after the Federal Reserve kept interest rates unchanged, while projecting slower US growth and higher inflation this year.
Bullion traded near $3,050 an ounce after rising 0.4% and hitting another peak on Wednesday. Fed Chair Jerome Powell acknowledged a high degree of uncertainty from President Donald Trump’s policy changes, but said the central bank isn’t in a hurry to adjust borrowing costs.
Powell said his base case is that any tariff-driven bump in inflation will be “transitory,” but later added it will be very challenging to say with confidence how much inflation stems from tariffs versus other factors. He also said recession odds have moved up, though are not high.
Gold has climbed 16% this year, extending last year’s stunning rally, with investors flocking to the precious metal for safety. Several major banks have also raised their price targets for bullion in recent weeks, with Macquarie Group forecasting it could rise as high as $3,500 an ounce.
Spot gold rose 0.1% to $3,050.19 an ounce as of 7:57 a.m. in Singapore, after hitting a record of $3,051.96 on Wednesday. The Bloomberg Dollar Spot Index dipped 0.1%. Silver, platinum and palladium all edged higher.
US policymakers issued fresh economic projections. Despite an upgrade to the inflation forecast, the bond market seized on the fact that growth estimates were dialed back — validating some of the concerns that Trump’s trade war and spending cuts will cool the economy. Fed officials continue to pencil in a half percentage point of rate cuts this year.
Source: Bloomberg
