Economy Update – Baghdad
Gold prices demonstrated stability in the early hours of trading in Asia today, Thursday, following the Federal Reserve’s decision to maintain interest rates. This move signals a cautious approach toward the trajectory of U.S. monetary policy for the remainder of the year.
Current Prices Overview
As of 0049 GMT, gold was trading at $2,761.79 per ounce in immediate transactions. U.S. gold futures witnessed a modest increase of 0.2%, reaching $2,774.50 per ounce, according to recent market data.
The Federal Reserve’s decision to hold interest rates steady comes amid a decrease in the unemployment rate, ongoing economic growth, and inflation levels that exceed the target rate. While few indications were provided regarding future cuts, the decision reflects caution given the current economic landscape.
Jerome Powell, Chair of the Federal Reserve, emphasized that the committee will await further signals concerning inflation and labor market progress before considering any rate reductions.
High interest rates typically diminish the appeal of non-yielding assets such as gold.
The decision to maintain the interest rate was widely anticipated after three consecutive cuts, totaling a full percentage point, in the previous year.
Market participants also processed the recent warnings from U.S. President Donald Trump regarding the potential imposition of tariffs. The White House has indicated that Trump is still contemplating significant tariffs on Mexico and Canada, while also considering additional fees on China in the near future.
Trump’s policies, perceived as contributing to inflationary pressures, could influence the Federal Reserve to sustain interest rates longer, thereby reducing gold’s attractiveness.
Expectations suggest that the European Central Bank is likely to announce interest rate cuts later today.
In the realm of other precious metals, silver registered a 0.2% increase to $30.85 per ounce, while platinum saw a 0.7% rise to $952.49 per ounce. Palladium also progressed by 0.5%, reaching $967.38 per ounce.
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