Gold up in Post-Settlement Trade as Fed Leaves Rate Cut Hopes Alive
Gold rallied in Wednesday’s post-settlement trading after the Federal Reserve kept the door open for an interest-rate cut further down the road.Spot gold, reflective of trades in bullion, traded at $1,350.21 per ounce by 2:24 PM ET (18:24 GMT), up $3.54, or 0.3%, on the day. It peaked at $1,358.13 in post-settlement trade, its highest level since April 2018.Gold futures for August delivery, traded on the Comex division of the New York Mercantile Exchange, were up $7.80, or 0.6%, at $1,350.70 per ounce. They hit a 13-month high of $1,365.95 in after-hours trade. Futures earlier closed official trading for Wednesday down $1.90 at $1,348.80.The Federal Reserve kept the fed funds rate unchanged in a range of 2.25% to 2.5% on Wednesday. But it signaled it was prepared to lean toward a more dovish stance amid slowing inflation and stuttering global growth.Traders were shifting attention to Fed Chairman Jerome Powell's press conference that started at 2:30 PM ET (18:30 GMT) for more insight into the central bank's thinking on monetary policy.Powell earlier this month boosted expectations for a rate cut, insisting that the Fed "will act as appropriate to sustain the expansion." Lower interest rates make safe-haven assets such as gold, which does not yield interest, more attractive while weighing on the dollar. And in prepared remarks, he repeated his vow to use the Fed's tools to sustain the domestic economy.In Wednesday’s session, the dollar index, weighted against a basket of six currencies, was down 0.6% at 96.695. It earlier fell to a one-week low of 96.57.Since the beginning of June, gold has only settled down twice as investors piled into the precious metal to hedge against a weakening of the dollar should the Fed tilt towards a rate cut. At post-settlement levels, Comex gold for August is up 3.7% month to date, heading for its biggest gain since December.