Gold Prices Reach All-Time Highs After Federal Reserve’s Monetary Easing
Gold prices surged on Thursday following the U.S. Federal Reserve’s decision to initiate a monetary easing cycle with a half-point move. This boost led bullion to reach all-time highs, coming just a few cents shy of the key $2,600 mark in the previous session.
Factors Driving Gold Prices
Spot gold saw a 0.7% increase, reaching $2,575.90 per ounce, while U.S. gold futures gained 0.1% to hit $2,600.60. The price of gold reached a record high of $2,599.92 on Wednesday after the Fed lowered its benchmark policy rate window by 50 basis points to 4.75-5%, aligning with expectations.
The Fed’s Projection
Federal Reserve policymakers indicated that the benchmark interest rate could see additional cuts, with a half percentage point drop expected by the end of this year, a full percentage point next year, and another half percentage point in 2026. This move, combined with fiscal and trade deficits, may further weaken the value of the dollar, according to experts like Alex Ebkarian, the chief operating officer at Allegiance Gold.
Insight into Gold’s Performance
Gold prices have been on the rise due to monetary policy easing by global banks, central bank buying, and geopolitical concerns. Bullion is often seen as a safe asset during times of political and economic uncertainty and tends to perform well in a low-rate environment.
Outlook for Precious Metals
UBS has projected a continued rally in gold prices, targeting $2,700 per ounce by mid-2025. The firm also expects greater demand for gold ETFs in the near future. Meanwhile, spot silver rose 2.4% to $30.78 per ounce, with UBS suggesting that silver stands to benefit from the rising gold price environment.
Platinum and palladium also saw gains, with platinum adding 1.4% to $982.27 and palladium increasing 1.7% to $1,079.75, highlighting the overall positive outlook for precious metals in the current market climate.
