Gold prices fell on Thursday after the US Federal Reserve, in its latest policy meeting, scaled back its view of only one interest rate cut this year, less than previously expected, even if inflation cooled in May.
Spot gold was down 0.4% at $2,313.92 per ounce at 0340 GMT. U.S. gold futures fell 1.1% to $2,329.50.
“Although the more moderate CPI print was a net positive for gold, the takeaway from the Fed meeting was that the number of rate cuts in 2024 has been reduced and is still some way off “said Tim Waterer, chief market analyst at KCM Trade.
“In the near term, I expect gold to trade choppy until we have more clarity on when the Fed’s first rate cut might come.”
The Fed held interest rates steady Wednesday and pushed back the start of rate cuts to possibly December, with policymakers citing still-high inflation levels.
In their December 2023 forecast, policymakers predicted an imminent start to three years of steady rate cuts.
Inflation data released just hours before the Fed’s statement showed that the consumer price index (CPI) did not rise at all on a monthly basis in May, leading some analysts to argue that the latest projections were already “stale.” .
Last week’s strong U.S. jobs data and news of the Chinese central bank’s suspension of gold purchases triggered the metal’s biggest daily decline since November 2020 last week.
Gold’s meteoric rally to successive all-time highs shows every sign of continuing into the second half of 2024, as the fundamental case for gold remains firmly in place, even if $3,000 an ounce seems just out of reach, traders and industry experts said.
In other metals, spot silver fell 1.9% to $29.12 an ounce, platinum fell 1.8% to $946.70 and palladium lost 1.2 % at $895.57.
