Gold prices steadied near record highs on Thursday, buoyed by mounting expectations of Federal Reserve interest rate cuts later this year and persistent geopolitical tensions that have stoked safe-haven demand.
Spot gold was last quoted at $3,044.44 an ounce as of 0928 GMT, after reaching an all-time peak of $3,057.21 earlier in the session. U.S. gold futures climbed 0.3% to $3,050.90. The surge follows Wednesday's Federal Open Market Committee (FOMC) meeting, where the central bank opted to keep interest rates unchanged but hinted at potential easing later in the year.
"The stage seems set for gold to continue higher, but the market may run out of near-term catalysts as traders price in the new post-FOMC consensus," said Ilya Spivak, head of global macro at Tastylive.
The FOMC's decision was seen as mildly dovish, with Fed Chair Jay Powell noting that while the U.S. economy remains solid, inflation pressures and broader economic uncertainties persist. Barron's described Powell's approach as successfully "threading the needle," striking a balance that left both financial markets and political figures, including President Trump, largely placated.
Traders are currently pricing in roughly 66 basis points of interest rate cuts by year-end, equating to two reductions of 25 basis points each, according to LSEG data. A cut in July is fully priced in.
The U.S. dollar index strengthened by 0.3% on Thursday, making gold more expensive for non-U.S. buyers and contributing to gold's stabilization just below its latest high. Peter Fertig, analyst at Quantitative Commodity Research, noted that despite dollar strength weighing on prices, "with the support of ongoing geopolitical factors and strong central bank demand, gold could still see upward momentum."
Central banks, particularly in emerging markets, have been aggressively adding to their gold reserves amid rising inflation fears and global political instability. Additionally, former President Trump's proposed tariffs-viewed by analysts as inflationary-have helped gold hit 16 record highs in 2024 alone, with four instances surpassing the $3,000 threshold.
Technical analysts see bullish momentum firmly in place. "Gold remains firmly bullish with the next resistance at the psychological $3,100 level... weakness below $3,030 may trigger a decline lower," said Lukman Otunuga, senior research analyst at FXTM. Wyckoff's Market Rating assigned gold a near-term score of 9.0 out of 10, citing solid technical support at $2,900.
The broader commodities market reflected mixed trends. Spot silver slipped 0.7% to $33.58 an ounce, platinum fell 0.3% to $990.20, and palladium eased 0.4% to $954.38. Silver futures, despite recent strength, dropped modestly by $0.265 to $33.94.
U.S. stock indexes, which saw their strongest FOMC-day gains since mid-2024, pointed to lower openings Thursday. The yield on the benchmark 10-year U.S. Treasury note stood at 4.204%, while Nymex crude oil futures hovered near $67.25 a barrel.
