As the U.S. central bank lowered interest rates by 25 basis points, gold surged more than 1.5% on Thursday, reaching 3.75%–4.0%. Even though Chairman Jerome Powell seemed cautious about the message about the path ahead. In the meantime, bullion rose to $3,995 in early Asian trading hours amid softer Treasury yields.
The Fed’s rate decision was decided by a split vote: 10 voted in favor and 2 voted against. Stephen Miran advocated for a deeper 50-basis-point drop, while Jeffrey Schmid, president of the Kansas City Fed, opposed any move. Powell hinted that a December cut was not guaranteed, sending gold below $3,920, but buyers quickly jumped back in.
Mr Jerome Powell says that, for the time being, the US job market remains strong. However, it is just at the edge. He has accepted that to fill in the gaps caused by the government shutdown, the Fed added state-level unemployment statistics. Interest in gold metal increased as yields decreased. The meeting between President Trump and Xi went well, and the two countries agreed to a 12-month cooling-off period; it has brought stability to the market.
