Gold was modestly lower Thursday, building on a loss seen a day earlier after the Federal Reserve delivered a widely expected interest rate cut but left traders uncertain on the outlook for further monetary easing.
Gold for December delivery GCZ19, -0.38% on Comex fell $6.80, or 0.4%, to $1,509 an ounce, while December silver SIZ19, +0.06% was up a penny at $17.92 an ounce.
Gold finished regular trading with a gain on Wednesday, but lost ground in electronic trade after the Fed decision. As expected, policy makers cut the Fed’s benchmark rate by a quarter of a point, but the move saw three dissents — with two officials urging rates to remain unchanged and one calling for a larger cut.
Meanwhile, Fed Chairman Jerome Powell, in his news conference, “did not explicitly commit himself to further rate cuts” and indicated the Fed would make its decisions from meeting to meeting based on data, leading the market to somewhat reduce expectations for further cuts, said Daniel Briesemann, analyst at Commerzbank.
The Fed’s lack of commitment to further monetary easing lent strength to the U.S. dollar, which rose versus most major rivals, and saw U.S. Treasury yields back up slightly. A stronger dollar can be a negative for commodities like gold that are priced in the unit, making them more expensive to users of other currencies. Higher bond yields can also dampen demand for gold, raising the opportunity cost of holding a nonyielding asset.
In other metals trade, October platinum PLV19, +0.29% rose 10 cents, or less than 0.1%, to $934.70 an ounce, while December palladium PAZ19, +0.64% was up 30 cents, or less than 0.1%< to $1,582.50 an ounce.
December copper HGZ19, +0.10% was off 0.2 cent, or 0.1%, at $2.611 a pound.