Gold Jumps As Traders Dissect Fed's Message Following Rate Cut

(RTTNews) - Gold prices moved notably higher on Friday even as investors cautiously dove into the message by the US Federal Reserve following the interest rate cut announcement on Wednesday and the underlying warning signals.

Front Month Comex Gold for September delivery rose by $27.80 (or 0.76%) to $3,671.50 per troy ounce today. Gold gained $22.10 (or 0.61%) per troy ounce for this week.

Today's price is the fourth highest close in history. Notably, gold prices have climbed for five consecutive weeks.

Front Month Comex Silver for September delivery surged by 82.90 cents (or 1.99%) to $42.536 per troy ounce today. Silver gained $14.90 cents (or 0.35%) per troy ounce for this week.

Today's price is a new 52-week high. Notably, silver prices have also risen for five consecutive weeks.

On Wednesday, the US Federal Reserve lowered the interest rate by 25 basis points to 4% to 4.25% range.

Traders pored over the details of US Fed Chair Jerome Powell's news conference following the announcement. Fed officials' forecasts suggest two more rate cuts this year but just one next year, although there were significant differences of opinion about the outlook.

With Powell's term set to expire in May 2026, traders feel that a new appointee by US President Donald Trump may exercise more rate cuts.

Powell called the rate cut strategy a "risk management response" to the cooling labor market and also warned that the effects of inflation on prices of goods would "continue to build" which, investors feel, could get in the way of further rate cuts.

The price of gold typically follows the US dollar value inversely, which in turn lost after the Fed's announcement but then appreciated reasonably. More rate cuts, if they happen, could push gold prices higher.

The central bank's next policy meetings are scheduled for October 28-29 and December 9-10.

Commenting on the intensely ongoing Russia-Ukraine war, Trump hinted that there may be "some good news" coming up, hinting at a ceasefire.

Meanwhile, Russian forces carried out large-scale drone strikes across Ukraine, targeting infrastructures and enterprises.

After around a week since Israeli Defense Forces attacked Hamas leaders in Doha, Qatar, killing five Hamas members, Qatari mediation for an Israel-Palestine ceasefire has been suspended.

Israeli Prime Ministed Benjamin Netanyahu proclaimed that the hunt for Hamas leaders "wherever they are" would continue. Even as Qatar vowed revenge, with Arab and Muslim leaders expressing solidarity with the nation, the situation remains calm for now.

Gold prices have soared around 40% so far this year, hitting multiple record highs in the journey.

Economists feel that in the near-term, low interest rates and geopolitical tensions could jack up gold prices.