Gold prices inched higher on Thursday as the US Federal Reserve announced a 25-basis-point interest rate cut, weakening the US dollar and increasing global demand for precious metals.
Spot gold rose 0.4% to $3,942.97 per ounce, while US gold futures for December delivery slipped 1.1% to $3,955 per ounce, reflecting mild profit booking after recent gains.
The Fed’s decision — the second rate cut of 2025 — lowered the benchmark rate to a target range of 3.75%–4.00%, aligning with market expectations. However, Fed Chair Jerome Powell signaled uncertainty about future cuts, emphasizing that upcoming decisions would depend on economic performance data.
Lower Rates, Higher Gold Demand
Gold traditionally performs well when interest rates decline, as lower yields reduce the opportunity cost of holding non-interest-bearing assets like gold.
The dollar index dropped 0.2%, making gold cheaper for investors holding other currencies. A weaker dollar typically enhances gold’s appeal, encouraging safe-haven buying among investors amid global economic uncertainty.
Meanwhile, silver prices also strengthened — rising 0.4% to $47.71 per ounce — while platinum climbed 0.6% to $1,594.90, and palladium gained 0.8% to $1,411.51.
Geopolitical Factors and ETF Trends
Market sentiment is also being shaped by the upcoming Trump–Xi Jinping meeting in South Korea. Global investors are watching for progress on US–China trade talks, which could influence commodity and currency markets.
Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), dropped 0.28% to 1,036.05 metric tonnes, suggesting some profit booking among institutional investors.
Analysts note that although gold remains firm after the Fed move, future price direction will depend on trade negotiations, US inflation data, and federal policy updates.
Market Outlook
Experts suggest gold could remain supported in the short term, especially if global growth concerns or geopolitical tensions intensify. However, any indication of a stronger dollar or rising bond yields might cap further gains.
Silver, platinum, and palladium are also expected to track global risk sentiment and industrial demand trends.
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