Gold prices reached a record high in Asian trading on Thursday after the US Federal Reserve kept interest rates unchanged and indicated it was considering up to three rate cuts this year.
Spot gold hit a new peak of $2,223 per ounce during the Asian session before paring gains to trade at $2,207.41 as of 06:50 GMT. Technically, gold has no upper resistance level identified, with recent support found at $2,150.
Berto Tordecilla
The US dollar sank following the Fed meeting, providing a huge boost to gold prices. Fed Chair Jerome Powell noted some recent inflation stickiness but said the underlying inflation trend remained easing. Fed officials forecast a 75 basis point cut in interest rates by the end of 2024.
Market pricing now implies a 73.4% chance of the Fed’s first rate cut coming as soon as June, according to the CME FedWatch tool.
While prospects of lower interest rates are positive for non-yielding gold, the Fed also upgraded its 2024 US economic growth forecast to 2.1% from 1.4% previously, which could limit safe-haven demand if optimism about a soft landing increases.
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