Gold eased on Thursday, pulling back from a near one-week high, after the U.S. Federal Reserve delivered a divided interest rate cut that left investors uncertain about the pace of easing next year, while silver notched another record high.
Spot gold fell 0.4% to $4,210.88 per ounce, as of 0707 GMT, after touching its highest since December 5 earlier in the session. U.S. gold futures for February delivery gained 0.3% to $4,238.10 per ounce.
“Gold has been unable to kick on with things today… because the Fed’s message was essentially that any further rate cuts could be few and far between,” KCM Trade Chief Market Analyst Tim Waterer said.
The Fed delivered a 25-basis-point rate cut in a divided vote on Wednesday but signalled that borrowing costs may not fall further as it waits for clearer signs of a cooling labour market and inflation that “remains somewhat elevated.”
While most policymakers expect they will need to cut rates again next year, an unprecedented six officials opposed even Wednesday’s quarter-point move. Fed Chair Jerome Powell also declined to offer guidance on the timing of any further cuts.
Lower interest rates typically benefit non-yielding assets such as gold.
Investors now await U.S. jobs and inflation data for November next week, followed by a detailed third-quarter economic growth report.
Spot silver added 0.2% to $61.90 per ounce after hitting a record high of $62.88 earlier in the session, bringing its year-to-date gain to 113% on strong industrial demand, falling inventories and its addition to the U.S. critical minerals list.
“Silver hasn’t really paid attention to things outside and has been rallying all by itself. I don’t think there’s anything here that would necessarily suggest that silver is going to turn,” said Ilya Spivak, head of global macro at Tastylive.
Spivak added that the next level of significance for silver is somewhere on its approach to $64.
Elsewhere, platinum rose 0.1% to $1,657.25, while palladium fell 0.1% to $1,473.68.
