Gold steadies near $4,000 as Fed delivers split 25 bps rate cut

Fed cuts rates by 25 bps to the 3.75%–4% range; decision not unanimous as Miran sought 50 bps and Schmid preferred no change.
Statement highlights moderate economic growth, slowing job gains, and inflation “somewhat elevated,” reinforcing cautious easing stance.
Fed to end balance sheet reduction on December 1, hinting at a shift toward neutral liquidity policy.

Christian Borjon Valencia FXStreet

Gold price rallies as the Federal Reserve (Fed) decided to cut interest rates by 25 basis points on Wednesday, as expected, though not unanimously. At the time of writing, XAU/USD trades volatile within the $3,990-$4,010 range as traders brace for Fed Chair Jerome Powell's press conference.

Traders eye Powell’s remarks for guidance after divided vote and signal to end balance sheet runoff

Most officials voted to reduce the fed funds rates to the 3.75%-4% range, while Fed Governor Stephen Miran voted for a 50-bps cut and Jeffrey Schmid of the Kansas City Fed opted to hold rates unchanged.

In the statement, the Fed mentioned that "economic activity has been expanding at a moderate pace." "Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated,” the Fed stated.

Regarding the balance sheet reduction, “The Committee decided to conclude the reduction of its aggregate securities holdings on December 1.”

Gold Price Reaction

XAU/USD seesawed within the $3,978-$4,010 range following the Fed’s decision, with traders waiting for Powell. The next key technical resistance seen is the day’s high at $4,030, followed by $4,050 and $4,100. On the downside, the first key support would be $3,900, followed by the current week’s low of $3,886

Economic Indicator

Fed Interest Rate Decision

The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).

AUD/USD hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold loses the grip; $4,000 comes next on the downside

Gold sets aside two daily advances in a row on Friday, opening the door to a potential test of the key $4,000 mark per troy ounce. The precious metal’s retracement follows a decent improvement in the sentiment surrounding the US Dollar, solid NFP data and higher US Treasury yields across the board.

Democrats win House and Senate in US midterms: Why isn’t all bad news for crypto

The biggest story this week was Tuesday’s US midterm elections, which saw Democrats win control of both the House and the Senate in a clear blue wave. This political shift in the US has triggered sharp price swings across the cryptocurrency market.

Week ahead – Inflation and geopolitics in focus as US political landscape shifts

Post-midterm election euphoria fizzles out as risk aversion prevails. US CPI, PPI and Fedspeak on the radar as Fed hike bets remain supported. Oil retreat pauses on mixed hopes about the ongoing conflicts.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.