Gold falls after the US interest rate cut

Gold fell today, after recording its highest level in nearly a week, after the Federal Reserve (the US central bank) split over its decision to lower interest rates, which made investors uncertain about the pace of monetary easing next year, while silver recorded another record high level.

Gold fell in instant transactions 0.2 percent to $4,221.49 per ounce by 0300 GMT, after touching the highest level since December 5 earlier in the session.

US gold futures for February delivery rose 0.6 percent to $4,249.70 an ounce.

“Gold couldn’t get ahead with today’s events… because the Fed’s message was essentially that any further interest rate cuts may be few and far between,” said Tim Waterer, chief market analyst at KCM Trade. The Federal Reserve cut interest rates by 25 basis points after a divided vote yesterday, but indicated that borrowing costs may not be reduced further until there are clearer signs of a slowdown in the labor market and inflation, which is “still fairly high.”

While most policymakers expect that they will need to cut interest rates again next year, six officials, in an unprecedented move, opposed yesterday’s decision to cut interest rates by a quarter of a percentage point.

Federal Reserve Chairman Jerome Powell declined to provide any indications on the timing of any further cuts. Low interest rates usually benefit non-yielding assets such as gold.

Investors are now awaiting US jobs and inflation data for November, which will be released next week, followed by a detailed report on economic growth in the third quarter.

As for other precious metals, silver rose in spot transactions by 0.8 percent to $62.25 per ounce after recording a record high of $62.88 earlier in the session, bringing its gains since the beginning of the year to 113 percent thanks to strong industrial demand and a decrease in inventories, adding it to the list of critical metals in the United States.

“Silver didn’t really care about external things and was rising on its own,” said Ilya Spivak, head of global macro at Tasty Live. “I don’t think there’s anything here that necessarily indicates that silver is going to fall.” Platinum rose 0.3 percent to $1,660.50, while palladium fell 0.2 percent to $1,479.70.