FX.co ★ Gold Falls on Fed Caution

Gold prices decreased to approximately $4,930 per ounce on Thursday, interrupting a two-day upward trend, as the US dollar gained strength following the Federal Reserve's caution on reducing interest rates. Fed Governor Lisa Cook expressed her reluctance to endorse further rate cuts, emphasizing continued inflation risks over signs of weakening in the labor market. Additionally, the nomination of Kevin Warsh by President Trump as the potential next Fed Chair, who is perceived as more hawkish compared to other candidates, prompted markets to adjust expectations towards a slower pace of rate reductions. From the data perspective, the ADP employment report indicated subdued growth in private payrolls, while the ISM services PMI exceeded expectations. Concurrently, tensions between the US and Iran persisted, despite planned nuclear discussions in Oman set for Friday, with Washington keeping the option of strikes open. Earlier in the week, gold experienced a more than 6% surge, marking its most significant intraday increase since 2008, driven by strategic buying following a substantial pullback from record highs the previous week.