Gold prices slipped 0.39% after the Fed’s rate cut, as stronger US jobless and manufacturing data cooled investor demand.
NEW YORK: Gold prices fell on Thursday during the North American trading session, retreating from recent highs after a combination of a Federal Reserve rate cut and stronger-than-expected US labour market data dampened investor appetite.
Following Wednesday’s anticipated rate reduction by the Fed, the price of XAU/USD dropped by 0.39%, pulling back from a session high of $3,673 to trade near $3,643. The decline came as markets responded to the latest US initial jobless claims, which came in below expectations, signalling continued resilience in the American workforce.
Analysts suggest the stronger labour and manufacturing figures are encouraging profit-taking among gold traders who had previously pushed the metal to record levels in anticipation of looser monetary policy.
“Stronger jobless and factory data suggests the US economy may withstand lower rates better than expected,” said one analyst. “That’s pushing real yields higher and making gold slightly less attractive in the short term.”
While gold remains a key hedge against inflation and macroeconomic instability, the current economic indicators are temporarily shifting sentiment toward risk assets, leading to a cooling in gold’s momentum.
Markets will now be closely watching upcoming economic releases and Fed commentary for further clues on the interest rate trajectory and its impact on the precious metals market.
