Gold Extends Losses After Fed Cuts Rates, Signals Less Easing

Gold extended declines after the Federal Reserve lowered interest rates and forecast less monetary easing for 2025.

Policymakers lowered their benchmark interest rate for a third consecutive time but reined in the number of cuts they expect in 2025, signaling greater caution over how quickly they can continue reducing borrowing costs. 

New quarterly forecasts showed several officials penciled in fewer rate cuts for next year than they estimated just a few months ago. They now see their benchmark rate reaching a range of 3.75% to 4% by the end of 2025, implying two quarter-percentage-point cuts, according to the median estimate.

Treasury yields and the dollar surged after the rate decision, sending bullion lower by as much as 1.2%. Lower rates typically benefit bullion as it pays no interest. Swap traders now see less easing after the statement from the Federal Open Market Committee.

Spot gold was 1.1% lower at $2,617.50 an ounce as of 2:09 p.m. in New York. Silver, palladium and platinum were all lower.