Gold surges back above $2,000 as Fed signals lower rates

Gold prices have rallied back above the $2,000 per ounce threshold after the U.S. Federal Reserve signalled an end to its tightening cycle and projected lower borrowing costs in 2024.

The Fed’s dovish tone sent the dollar tumbling to a four-month low and benchmark 10-year Treasury yields to late-July lows, boosting gold’s appeal as a non-yielding asset.

Spot gold was trading at $2,034.91 per ounce as of 10:30 GMT Thursday morning, after surging 2.4% on Wednesday.

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Markets now see an 89% chance of a Fed rate cut in March, with 17 of 19 policymakers projecting lower rates by end-2024. The lowered rate outlook has powered gold’s ascent as lower yields burnish bullion’s relative allure.

Investors are now eyeing policy decisions from the European Central Bank and Bank of England due later Thursday. With the Fed signalling a pause in tightening, gold bugs may have finally seen the light at the end of the rate-hike tunnel.