Sept 19 (Askume) – Gold prices rose more than 1% on Thursday as the Federal Reserve stepped up its monetary easing cycle by half a percentage point, pushing prices to a record high and just a few cents away from the key upper limit of $2,600 ahead of a meeting.
Spot gold was up 1.1% at $2,586.99 per ounce by 11:49 a.m. ET (1549 GMT), while U.S. gold futures were up 0.5% at $2,612.50 per ounce.
Spot prices hit a record high of $2,599.92 on Wednesday after the Federal Reserve narrowed its benchmark policy rate window by 50 basis points to 4.75-5%, a move that was in line with traders’ expectations ahead of the decision.
Fed policymakers also expect the benchmark interest rate to fall by half a percentage point by the end of this year, a full percentage point next year, and half a percentage point in 2026.
Alex Abkarian, chief operating officer of Allegiance Gold, said: “The market is considering a deeper rate cut as we have both fiscal and trade deficits, which will further weaken the overall value of the dollar.”
“If you combine geopolitical risks with the current deficit, low-yield environment and weak dollar, the combination of all these factors will cause gold to rise.”
Gold prices have hit record highs several times this year on loose monetary policy by global banks, strong central bank buying and geopolitical concerns.
Gold bullion is considered a safe asset in times of political and economic uncertainty. It also thrives in a low-interest rate environment.
UBS said in a report: “We believe this rally is likely to extend even further. Our target is $2,700 an ounce by mid-2025. Apart from near-term risk factors, we expect gold ETF demand to pick up in the coming months.” Accelerate growth.
Elsewhere, spot silver rose 3.3% to $31.06 per ounce, having hit its highest since July in the previous session.
UBS said: “We believe silver will benefit from a higher gold price environment.”
Platinum rose 2.4% to $991.95 and palladium added 3% to $1,094.11.
