Gold price trades volatile within the $2,565-$2,587 range during the North American session after the Federal Reserve cut rates by 50 bps while expecting the fed funds rates to end in 2024 at around 4.4%, according to the median. At the time of writing, XAU/USD trades post gains of over 0.50%.
Summary of Fed’s monetary policy statement
In their monetary policy statement, Fed officials acknowledge that economic activity continues to expand solidly, though the unemployment rate has “moved up.” They added that although inflation “remains somewhat elevated,” the Committee “has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance.” The FOMC noted that the economic outlook is uncertain.
The Fed’s decision was not unanimous as Governor Michell Bowman voted for a 25 bps rate cut.
Regarding the Summary of Economic Projections (SEP), officials are already expecting another 50 bps of cuts toward the end of 2024 and 100 bps of cuts in 2025.
Gold’s reaction to the Fed’s decision
On the Fed’s decision, the gold price reached a new all-time high of $2,591, yet traders prepared for the Fed Chair Powell press conference.
Source: Fxempire
