Gold dumps over $12 on another hawkish rate cut from the Fed

  • The Fed cuts rates by 25bp as expected and GBP/USD falls.
  • Fed cuts interest rate on excess reserves to 1.55% from 1.80%.
  • Gold drops over $12 of 0.85% on Fed hawkish cut. 

Gold has been volatile on the day, settling higher in the futures ahead of the Federal Reserve interest rate decision, and then falling post the rate cut. Spot Gold had been trading as high as $1495.69 before it dropped to a low of $1,483.16, in an extension during Powell's presser. December gold was higher by  $6, or 0.4%, at $1,496.70 on Comex, ahead of the Fed news.

US dollar index climbed

US dollar index climbed to a session high of 97.80, from 97.72 , immediately after the Fed cuts rates by 25 basis points which were a weight on the yellow metal. Investors and the consumer will cheer such a move, and with anticipation of further cuts down the line,  investment into US-denominated assets could be seen to be supporting the US Dollar in the near term and thus be a wight on the Gold price which had benefited from geopolitical and economic tensions this year. 

One of the major takeaways from initial releases of the decision and statement was the wording that had changed to The Federal Open Market Committee said it "would monitor the economic outlook as it "assesses the appropriate path of the target range for the federal funds rate." December gold was at $1,494.10 an ounce in electronic trading, shortly after the Fed policy statement. 

Key takeaways from the Fed

  • Rates lowered to range of 1.50%-2.00%.
  • Markets priced in a 97% chance of a cut before the decision.
  • Prior range was 1.75%-2.00%.
  • Uncertainties remain, will assess the appropriate rate path.
  • George and Rosengren wanted no change.
  • Change of wording in the statement says it will monitor incoming info "as it assesses the appropriate path" for the target range.
  • Sets IOER at 1.55%, as expected.
  • Economic activity has been rising at a moderate rate, the same as prior.
  • Repeats that job gains have been solid, on average, in recent months, and the unemployment rate has remained low.
  • Household spending has been rising at a strong pace vs 'appears to have picked up'.

Market takes this as a hawkish cut

"With rates potentially on hold for the remainder of the year, equities surging to all-time highs and a persistent sense of optimism on the trade front, the yellow metal could face significant headwinds in the near term," analysts at TD Securities explained. 

"Indeed, the stalling of the rally continues to see momentum signals fade, as the trigger for modest long liquidations has crept higher from $1,475/oz yesterday, to $1,482/oz today, which increases the risk of a swift gap to the downside should the market receive a "hawkish" cut."


From here, the rest of the week will be key, with plenty of scheduled data to digest which will surely rock the apple cart one way or the other should the data be out of line with expectations. For the price of Gold, the next key data will be Chinese Manufacturing, nonfarm Payrolls and US Manufacturing. 

Key manufacturing data ahead and trade wars:


Gold levels


Today last price 1484.73
Today Daily Change -2.97
Today Daily Change % -0.20
Today daily open 1487.7
Daily SMA20 1494.82
Daily SMA50 1504.54
Daily SMA100 1466.03
Daily SMA200 1382.81
Previous Daily High 1494.8
Previous Daily Low 1483.98
Previous Weekly High 1517.92
Previous Weekly Low 1481.05
Previous Monthly High 1557.03
Previous Monthly Low 1464.61
Daily Fibonacci 38.2% 1488.11
Daily Fibonacci 61.8% 1490.67
Daily Pivot Point S1 1482.85
Daily Pivot Point S2 1478.01
Daily Pivot Point S3 1472.03
Daily Pivot Point R1 1493.67
Daily Pivot Point R2 1499.65
Daily Pivot Point R3 1504.49



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

GBP/USD stays below 1.3350 on poor UK PMIs

GBP/USD hits fresh session lows of 1.3335 following an unexpected drop in the UK's Preliminary Manufacturing and Service PMI reports. However, the downside appears capped amid growing Brexit optimism. 


EUR/USD keeps range around 1.1130 on downbeat PMIs

EUR/USD trims gains to trade near 1.1130 region after the sentiment around the euro was dented by the disappointing German and Eurozone Preliminary Manufacturing PMIs. Trade concerns also keep the gains limited. 


The phantom of fear pierces crypto market foundations

Negative technical indicators are extremely volatile and are approaching a technical rebound. Ethereum has fundamentals in play versus Bitcoin which could be lethal. XRP is not immune to downfalls and adds to the dangerous game of critical supports.

Read more

Gold consolidates in a range, flat-lined around $1475 level

Gold extended its sideways consolidative price action through the early European session on Monday and remained confined in a narrow trading band near the $1475 region.

Gold News

USD/JPY: Holding on to higher ground but lacking momentum

Positive developments between the US and China keep the mood up. Japanese data mixed, industrial figures continue disappointing. USD/JPY needs to advance beyond 109.72, December monthly high.