Blitz Bureau
NEW DELHI: Gold prices slipped after the US Federal Reserve kept interest rates unchanged and signalled a more gradual path for rate cuts, analysts said on June 27.
US Fed Chair Jerome Powell noted the central bank expects an increase in inflation in the coming months amidst tariffs and other factors, reinforcing a cautious policy stance. While markets initially responded with optimism, Powell tempered expectations by reiterating that with low and stable unemployment, the Fed is well-positioned to wait for more data before making any moves.
Though he hinted that September could be a “live” meeting, however market participants have been discounting the same since sometime. Fed still anticipates rate cuts totaling 50 basis points in 2025, but now sees only 25 basis points of easing each in 2026 and 2027. “Powell emphasised that these forecasts are highly data-dependent, especially on inflation trends. Meanwhile, geopolitical developments added to market uncertainty, as President Donald Trump floated the idea of meeting with Iran over the Iran-Israel conflict, and Russian President Vladimir Putin expressed readiness for substantive peace talks with Ukraine,” said Manav Modi, Senior Analyst, Commodity Research at Motilal Oswal Financial services Ltd.
There is still no resolution on the Israel and Iran and the war like situation continues however expectations of an ease off is weighing on prices.
“US weekly jobless claims also was reported lower than expectations giving a jerk to prices. Volatility could be lower today as US markets remain shut on the back of public holiday,” he mentioned.
