Gold prices rallied more than 1.5% on Thursday after the Federal Reserve (Fed) delivered a widely expected rate cut, even as Chair Jerome Powell adopted a notably hawkish tone during his post-meeting remarks. Softer US Treasury yields and renewed geopolitical tensions further supported the metal, with spot gold trading around $3,995 at the time of writing.
Bullion rebounds above $3,990 amid falling yields and geopolitical unease
On Wednesday, the Fed reduced its benchmark rate by 25 basis points to a target range of 3.75%–4%, with a 10–2 vote split. Fed Governor Stephen Miran dissented in favor of a deeper 50-basis-point cut, while Kansas City Fed President Jeffrey Schmid preferred holding rates steady.
At the press conference, Powell cautioned that “a further reduction in the policy rate at the December meeting is not a foregone conclusion far from it,” sparking a brief selloff that pushed gold below $3,920 before prices rebounded through Thursday’s Asian and European sessions.
Powell emphasized that the labor market remains the Fed’s main concern. Despite disruptions in official data due to the government shutdown, the Fed Chair noted that alternative indicators, such as state-level unemployment claims, suggest the job market is not weakening significantly. He added that several FOMC members now view rates as approaching a neutral level.
Gold’s rally could face headwinds from positive developments in US-China trade relations after Presidents Donald Trump and Xi Jinping met in South Korea, agreeing to a one-year trade truce.
Daily market movers: gold rises despite firm US dollar
The US Dollar Index (DXY), which tracks the greenback against six major peers, gained 0.37% to 99.50. Meanwhile, US Treasury yields edged lower, with the 10-year note steady at 4.091%. Real yields which typically move inversely to gold rose 1.5 basis points to 1.791%.
Following the Trump–Xi meeting, the US president described the discussions as “amazing,” noting that China agreed to resume soybean purchases while the US reduced fentanyl-related tariffs to 10% and cut overall tariffs on Chinese goods from 57% to 47%. Trump also claimed progress on rare-earth trade issues.
The Fed’s policy statement confirmed that its Quantitative Easing (QE) program will conclude on December 1. Market data from Prime Market Terminal shows expectations for another Fed rate cut in December at 76%, down from 85% before this week’s decision.
Technical outlook: gold eyes $4,000 breakout
Gold’s technical setup remains bullish, with momentum building toward a potential breakout above the $4,000 mark. A daily close above this level could trigger a move toward the 20-day Simple Moving Average (SMA) at $4,079.
The Relative Strength Index (RSI) indicates strengthening buyer momentum, hinting at further upside potential in the near term.
If bulls push past the 20-day SMA, resistance lies ahead at $4,100 and the October 22 high of $4,161. Conversely, a daily close below $4,000 could expose gold to a deeper pullback toward the October 28 low at $3,886 and the 50-day SMA near $3,779.
