Gold holds steady as markets await more cues on Fed policy

Shafaq News

Gold prices were flat on Friday as markets awaited more cues
on the U.S. policy path after the Federal Reserve’s 25-basis-point rate cut and
the outlook on further easing in the months ahead failed to meet investors’
dovish expectations.

Spot gold was little changed at $3,646.29 per ounce as of
0640 GMT. Bullion had hit a record high of $3,707.40 on Wednesday.

U.S. gold futures for December delivery were also flat at
$3,679.40.

“Sentiment is still bullish but has definitely cooled
off a bit. Basically, the Fed didn’t really deliver with the dovish guidance
needed for gold to push higher,” Capital.com analyst Kyle Rodda said.

“The projection of two more cuts this year was a
positive. However, the forecast of only the one cut in 2026 was above market
pricing and has had the effect of pushing up yields and the dollar.”

The Fed resumed rate cuts on Wednesday and opened
the door to further easing, but tempered its message with warnings of sticky
inflation, sowing doubt over the pace of future easing.

Fed Chair Jerome Powell characterised the policy action as a
risk-management cut in response to the weakening labour market and said the
central bank was in a “meeting-by-meeting situation” regarding the
rate outlook.

Traders are pricing in a 92% chance of another 25-bp cut at
the Fed’s October meeting, according to the CME Group’s FedWatch tool.

Lower rates reduce the opportunity cost of holding
non-yielding bullion.

Meanwhile, the Bank of England and the Bank of Japan held
interest rates steady this week.

On the technical front, spot gold may break support at
$3,630 per ounce and fall into a range of $3,596 to $3,617, according to
Reuters technical analyst Wang Tao.

Elsewhere, spot silver rose 0.8% to $42.12 per ounce,
platinum eased 0.3% to $1,379.50. Palladium was steady at $1,151.19 but was
headed for a weekly fall, declining 3.5%.

(Reuters)

Only the headline is edited by Shafaq News Agency.