Gold hardly changed after Fed holds rates steady

Bengaluru — Gold prices held steady on Thursday after the Federal Reserve held interest rates steady and indicated it is still leaning towards eventual cuts, while investor focus shifted to the US nonfarm payrolls data.

Spot gold was little changed at $2,317.77/oz by 5.04am GMT. Prices rose 1.4% on Wednesday, their best day in over two weeks.

US gold futures rose 0.7% to $2,327.60.

The Fed’s latest policy statement kept key elements of its economic assessment and policy guidance intact, framing its discussion of interest rates around the conditions under which borrowing costs can be lowered.

Fed chair Jerome Powell said the next move would depend on the data, but there was unlikely to be an increase.

Traders were relieved that Powell slammed the door shut for further hikes, helping gold prices climb back above $2,300, said City Index senior analyst Matt Simpson.

Following the meeting, US short-term interest-rate futures rose as traders added to bets that the Fed will deliver at least one cut this year in 2024.

Lower interest rates increase the appeal of holding non-yielding bullion.

The US nonfarm payrolls report is due on Friday.

“What traders would love to see now is a softer set of NFP figures.... We’re fast approaching the second half of the year, and in all the time central banks continue to pile into physical gold, I suspect gold can hold above $2,000 for the remainder of the year and break above $2,500,” Simpson said.

Spot platinum gained 1% to $959.35/oz after hitting a two-week high earlier in the session, and palladium advanced 0.4% to $952.38. Meanwhile, silver fell 0.3% to $26.57.

“Platinum reached price parity with palladium, driven by its growing use in auto catalysts for [petrol]-powered cars,” analysts at ANZ wrote in a note.

“On the supply side, platinum is more supported than palladium due to operational challenges in SA.”

Reuters