Gold Takes a Hit, Powell Dampens Rate Cut Hopes
Gold prices reversed course below $3,950 an ounce on Wednesday, erasing all of the day's gains after Fed Chairman Powell warned that a December rate cut was not a certainty, reducing the market's chances of another 25 basis point rate cut and pushing the U.S. dollar and 10-year Treasury yields above 4%, which increases the financing costs of holding non-yielding bullion.
The cautious tone also partly offset the Fed's 25 basis point rate cut to a target range of 3.75–4.00% and its decision to end its balance sheet reduction in December, both of which reduced short-term real interest rates and added liquidity that typically supports precious metals.
Official central bank purchases and renewed ETF accumulation have tightened the availability of metals on exchanges and in official channels, providing a strong floor under prices. Progress on the US-China trade framework has reduced some safe-haven inflows, but has not removed deeper drivers for gold, such as ongoing macroeconomic uncertainty and concerns about currency depreciation.
Source: Newsmaker.id
