By Daniel Takieddine, Co-founder and CEO, Sky Links Capital Group
Gold retreated slightly after the Federal Reserve delivered its widely expected 25-basis-point rate cut. While the decision could keep the metal supported near record levels, Chair Jerome Powell’s cautious tone tempered expectations.
Powell described the move as a risk-management measure to counter labour market weakness and stressed that future cuts would be decided “meeting by meeting.” Markets still see a high probability of another 25-basis-point reduction in October, though the Fed’s guidance leaned slightly hawkish, with officials reluctant to fully endorse deeper easing.
The outcome leaves gold sensitive to incoming data, particularly labour and inflation indicators. Softer data could raise expectations for a dovish stance and bolster the bullion. Conversely, resilient data could favour US Treasury yields.
In the meantime, geopolitical tensions in the Middle East and Eastern Europe show no signs of easing, sustaining safe-haven demand and reinforcing the bullish backdrop for gold.