Gold prices ticked lower during Thursday's Asian trade after hitting fresh record highs in the wake of the United States Federal Reserve’s widely expected rate cut, as Fed Chair Jerome Powell’s measured comments tempered expectations for aggressive easing and boosted the U.S. dollar.
Spot gold was trading $1.90 or 0.1% lower at US$3,657.97 per ounce by 3:30 pm AEST (5:30 am GMT).
The metal had surged to an all-time high of $3,707 on Wednesday immediately after the Fed’s announcement, before settling near $3,650.
The Fed cut its benchmark interest rate by 25 basis points, with its Summary of Economic Projections indicating two further cuts this year.
The initial signal of looser monetary policy drove a sharp selloff in the U.S. dollar and propelled gold higher.
However, Powell struck a cautious tone in his press conference, describing the move as a “risk-management cut” in response to a weakening labour market.
He noted that future decisions would be made on a “meeting-by-meeting” basis, curbing bets on a faster pace of easing.
The dollar and Treasury yields rebounded strongly after Powell’s remarks, pressuring the non-yielding metal.
Traders now assign an 87.7% chance of another 25-basis-point cut at the Fed’s October meeting, up from 74.3% a day earlier, according to CME Group FedWatch Tool.
Market focus now turns to weekly U.S. jobless claims data later in the U.S. session, which could provide fresh direction for bullion traders.
