10.12.202520:24:12UTC+00Gold Turns Positive After Powell's Remarks

Gold prices climbed above $4,230 per ounce on Wednesday, reaching October highs and marking a record peak. This upward movement came as markets evaluated the Federal Reserve's decision and absorbed the implications of Chair Powell's comments following the meeting. The committee indicated the possibility of another rate cut next year, with Powell's language suggesting flexibility on whether to halt or continue with either modest or more significant reductions. This was interpreted as opening the possibility for further easing, leading traders to increase the likelihood of two or more cuts by 2026 to approximately 68%. Concurrently, a slight alteration in the statement regarding the timing and scale of future policy adjustments suggested a potential pause, allowing time to assess incoming economic data, thus making any future rate reductions contingent on evolving conditions. Additionally, policymakers marginally raised their economic growth projections while simultaneously lowering inflation expectations for 2025 and 2026. This combination of factors resulted in a decrease in short-term real interest rates, exerting pressure on the dollar, while preventing long-term real yields from drastically falling.