Gold pulls back as bulls pause after Fed decision, geopolitical jitters persist
Gold price retreats on Thursday as bulls take a breather following the Federal Reserve's (Fed) latest monetary policy decision and an escalation of hostilities in the Middle East. The XAU/USD trades at $3,042, down over 0.19%.
Market sentiment turned negative, while the Greenback stages a recovery as depicted by the US Dollar Index (DXY), which tracks a basket of six currencies against the buck.
Gold traders failed to drive prices higher, even though the Fed held rates unchanged at the 4.25%–4.50% range for the second consecutive meeting. Officials added that they will slow down the pace of quantitative tightening (QT).
Fed policymakers acknowledged that the jobs market remains solid but added that prices remain high. Therefore, they emphasized they would monitor risks for both sides of the dual mandate.
They also updated their projections about interest rates, economic growth, the Unemployment rate and inflation. Policymakers foresee two rate cuts in 2025, revising the economy downward, and project inflation ticking higher alongside the Unemployment Rate.
Traders are also digesting Fed Chair Powell's neutral and patient stance. He said that “uncertainty around the (economic) outlook has increased,” adding that some tariff inflation has been passed on to consumers. Powell commented, "Our current policy stance is well positioned to deal with the risk and uncertainties we face.”
Powell added that some of Trump’s policies weighed on growth and increased prices.
In Gaza, Israel airstrikes continued with at least 91 Palestinians killed and dozens wounded, according to Reuters.
Source: FXstreet
