Gold slips to two-week low after US Fed dashes hopes of more rate cuts

Bengaluru — Gold prices dropped to two-week lows on Thursday after the US Federal Reserve cut rates by 25 basis points as expected but tampered market expectations of a lengthy easing cycle, lifting the dollar to a two-year high.

However, Fed chair Jerome Powell, speaking in a news conference after the release of the central bank’s statement, characterised Wednesday’s rate cut as “a mid-cycle adjustment to policy”, a sign to markets that further sharp cuts are not imminent. In the wake of Powell’s comments, the dollar rose 0.3% to a two-year high on Thursday, making gold more expensive for holders of other currencies.

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