Prices Pull Back After Fed Comments
Gold prices fell nearly 1% on Thursday, slipping from a record peak earlier in the day after Federal Reserve Bank of Dallas President Lorie Logan urged caution on additional interest rate cuts. Spot gold was down 1% at $3,828.75 per ounce by late morning in New York, while U.S. gold futures for December delivery dropped 1.1% to $3,853.20.
Logan said that while last month’s rate cut helped protect against potential labor market deterioration, the central bank should remain “cautious” about further easing. The remarks tempered some investor optimism about aggressive policy moves at the Fed’s upcoming meeting.
Market Reaction and Outlook
RJO Futures strategist Bob Haberkorn noted that Logan’s comments weighed on gold even if a single governor cannot determine policy alone. “It throws some caution in the market on how aggressive the Fed is going to be in their next meeting,” he said. Despite this, traders continue to price in a 99% chance of another rate cut this month.
Gold, a traditional safe-haven asset, tends to benefit from lower interest rates. Prices had earlier surged to an all-time high of $3,896.49 amid uncertainty fueled by the ongoing U.S. government shutdown. So far this year, the metal has gained 46%, underscoring robust investor demand.
Shutdown and Geopolitical Support
The second day of the U.S. government shutdown has already delayed key economic data, including the weekly jobless claims report, with Friday’s nonfarm payrolls report also at risk of postponement. Analysts say the lack of reliable economic indicators adds to uncertainty, which usually supports gold prices.
Broader geopolitical and trade concerns are also contributing. “With trade tensions and tariffs shaping the global landscape, and with geopolitical hotspots showing little sign of resolution, the environment remains supportive for safe-haven demand,” financial services firm StoneX said in a note.
Analysts Remain Bullish
Despite Thursday’s pullback, banks remain positive on gold’s long-term outlook. Goldman Sachs reaffirmed its $4,000 per ounce forecast for mid-2026 and $4,300 for the end of 2026, noting that upside risks to those targets have intensified.
Other precious metals also weakened Thursday. Spot silver fell 2.7% to $46.06 per ounce, platinum declined 1.2% to $1,539.10, and palladium lost 1.8% to $1,221.90.
With global uncertainty and U.S. fiscal gridlock likely to persist, analysts expect safe-haven demand to keep gold near record levels even as short-term fluctuations continue.
