Gold prices climbed over 1 per cent on Thursday after hitting a record high in the previous session, as the US Federal Reserve embarked on its rate easing cycle, reports Reuters.
Spot gold rose 1.1 to $2,586.37 per ounce by 1105 GMT, while US gold futures rose 0.5 per cent to $2,611.50. Spot gold had scaled an all-time high of $2,599.92 on Wednesday.
The Fed kicked off an anticipated series of interest rate cuts with a larger-than-usual half-percentage-point reduction, in a move meant to show policymakers' commitment to sustaining a low unemployment rate now that inflation has eased.
In addition, Fed policymakers projected the benchmark interest rate would fall by another half of a percentage point by the end of this year, a full percentage point next year, and half of a percentage point in 2026.
"The prospect of further rate cuts makes gold attractive and new record prices cannot be ruled out," said Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany.
Lower interest rates reduce the opportunity cost of holding bullion, which yields no interest.
The $2,600 mark proved too high a hurdle for now given how far and fast gold prices rose in anticipation of the Fed's September cut, said Adrian Ash, director of research at Bullionvault.
"There's lots of room for gold's bull market to keep running as the real returns to cash fall into the election and then into new year 2025."
Spot silver rose 3.5 per cent to $31.12 per ounce after hitting its highest level since July in the previous session.
U.S. stocks closed down in choppy trading on Wednesday, after the Federal Reserve cut interest rates by a relatively hefty half-percentage-point.
Platinum added about 2 per cent to $987.71 and palladium gained 2.1 per cent to $1,084.
© 2024 - All Rights with The Financial Express
