Gold Falls as Dollar Rises Following U.S. Rate Cut

SadaNews Economy - Gold prices declined from their all-time high during trading on Thursday, September 18, as investors absorbed remarks from U.S. Federal Reserve Chair Jerome Powell in his speech following the bank's decision to cut interest rates by 25 basis points.

The Federal Reserve revealed that it will continue to steadily reduce borrowing costs for the remainder of this year, while Powell described the rate cut decision as a measure to manage risks in response to a weak labor market.

Powell emphasized that the Federal Reserve is "strongly committed to maintaining its independence," at a time when the proposal to cut rates by 50 basis points did not receive broad support within the committee.

He also noted that tariffs are likely to affect the labor market, predicting they will contribute to rising prices over the current and upcoming year.

Gold prices have jumped 39% so far this year, following a 27% gain last year, supported by expectations of U.S. rate cuts, ongoing geopolitical tensions, and strong purchases from central banks.

The drop in gold prices today coincided with a rise in the U.S. dollar, which gained after the Federal Reserve meeting, and a strong dollar typically makes the precious metal more expensive for holders of other currencies.

In terms of trading, gold futures fell by approximately 0.8% to $3689.3 per ounce, while the spot price of the yellow metal declined by 0.1%, recording $3653 per ounce.