Gold Climbs After Falling Wednesday on Powell Rate Comment
Gold climbed after tumbling on Wednesday as the Federal Reserve held interest rates, and Chair Jerome Powell said the central bank isn’t in a rush to cut despite trade-war uncertainty.
Bullion traded near $3,375 an ounce, after losing 2% in the previous session. Powell warned that President Donald Trump’s tariff agenda raises the risk of both higher inflation and slowing growth, but added the Fed could afford to keep policy on hold until officials have a better understanding of where the economy is headed.
“The effects on inflation could be short-lived, reflecting a one time shift in the price level,” he said. But it’s “also possible that the inflationary effects could instead be more persistent.” Any trade certainty would have to come from the White House, Powell said.
The dollar pushed higher after the Fed chief’s comments, making bullion more expensive for most buyers. The possibility of fewer rate cuts is also negative for gold as it doesn’t offer interest, so becomes relatively more attractive in a lower-rate environment. Traders are still betting on at least three interest-rate cuts in the rest of 2025, with most of the market viewing a reduction as likely in July.
Investors were also monitoring the latest trade announcements from the White House. Trump said on Wednesday he’s unwilling to preemptively lower tariffs on China ahead of a key meeting in Switzerland later this week to discuss trade between the two countries.
Gold has climbed almost 30% this year, with investors seeking refuge amid widespread market chaos unleashed by Trump’s aggressive trade and geopolitical policies. It hit a record above $3,500 an ounce in April, before losing some ground in recent weeks. The ascent has also been driven by speculative demand in China and central-bank purchases.
Spot gold was up 0.5% to $3,382.82 an ounce as of 8:40 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat, after gaining 0.5% on Wednesday. Silver was steady, while palladium edged higher.
Source : Bloomberg
