Powell’s cautious tone triggers investor profit-taking
Gold prices slipped nearly 1% on Wednesday after briefly reaching an all-time high, as traders digested Federal Reserve Chair Jerome Powell’s remarks following the central bank’s latest rate cut. Spot gold fell 0.9% to $3,658.25 per ounce after hitting a record $3,707.40 earlier in the session. U.S. gold futures for December delivery closed 0.2% lower at $3,717.80.
This marks the first rate cut by the Fed in 2025, after holding policy steady since December. The 25-basis-point reduction signals the beginning of a gradual easing cycle. However, Powell’s statement that the Fed is now operating on a “meeting-by-meeting” basis highlighted ongoing uncertainty.
Market takes profits but uptrend remains intact
Analyst Tai Wong noted the move triggered understandable profit-taking. “This is a risk-management cut, and a retracement is healthy,” he said. Wong believes the short-term uptrend in gold remains intact unless the price dips below key technical support at $3,550.
Gold has climbed nearly 6% in June and 39% year-to-date. Falling interest rates typically bolster gold’s appeal, as they lower the opportunity cost of holding the non-yielding asset. The latest rally has also been fueled by central bank purchases, demand for safe-haven assets, diversification away from the U.S. dollar, and overall dollar weakness.
Analysts raise forecasts as metals market cools
Deutsche Bank raised its 2026 gold price forecast to an average of $4,000 per ounce, up from its previous estimate of $3,700. Despite Wednesday’s retreat, strong structural drivers are expected to support gold in the medium term.
Other precious metals also declined. Spot silver dropped 2.4% to $41.51 per ounce. Platinum fell 2.2% to $1,360, while palladium slid 2.6% to $1,145.44.
