Daily Gold Update

Source:Bill Musgrave, American Gold Exchange

AustinNew York spot gold eased 0.2% to close under $3,682 as the dollar edged higher and traders took profits from a series of new record highs ahead of the Fed's decision on interest rates. Bullion then added around $10 an ounce after the Fed cut by a quarter-point and projected two more this year. Silver shed 1.8% to finish at $41.72 an ounce.

As almost universally expected, the Federal Reserve lowered its benchmark rate by 25 basis points to a range of 4%-4.25%, opting to focus on a weakening labor market instead of rising inflation. It is the first reduction in nine months.

The decision was unanimous except for new Governor Stephen Miran, who joined the Fed board yesterday. A member of the Trump administration on leave, Miran advocated a much bigger cut.

Perhaps more interesting, the so-called dot plot of projections indicate two more quarter-point rate cuts are slated for this year. Policymakers continue to anticipate inflation ending 2025 at 3%, well above the Fed's 2% target.

The dollar edged up slightly before the decision on speculation that the Fed would refrain from a larger rate cut. A rising dollar pressures gold and other commodities by making them pricier in other currencies.

Benchmark 10-year Treasury yields dipped slightly, limiting gold's slide by reducing the opportunity cost for holding it instead of bonds for safety.

Platinum and palladium both dropped 0.7%.

At the New York spot close: gold eased $71.0 to $3,681.80; silver slid 75 cents to $41.72; platinum dropped $9.90 to $1,383.65; and palladium retreated by $8 to $1,173.35 an ounce.