Gold prices rose in the European market on Thursday, extending gains for a third consecutive session, supported by a weaker US dollar after the latest Federal Reserve meeting delivered a less-hawkish tone than markets had anticipated.
As expected, the Federal Reserve cut its benchmark rate by 25 basis points to a range of 3.75 percent — the lowest since September 2022 — marking a third consecutive rate cut.
Price Overview
• Gold prices today: Spot gold rose 0.45 percent to $4,247.81, from an opening level of $4,228.27, after touching an intraday low of $4,210.44.
• At Wednesday’s settlement, gold gained 0.5 percent, marking a second straight daily advance as investors increased safe-haven buying following the Fed meeting.
US Dollar
The US dollar index fell 0.1 percent on Thursday, deepening losses for a second session, and reached a two-month low of 98.54, reflecting continued weakness in the currency against a basket of major peers.
The outcome of the Fed meeting strengthened expectations for two additional rate cuts next year, compared with the Fed’s median projection of a single 25-basis-point cut.
Nick Rees, head of macro research at Monex Europe, said the most important takeaway was the Fed’s tilt toward easier policy in both the statement and Chair Jerome Powell’s press conference.
Federal Reserve
At the final policy meeting of 2025, the Fed cut rates by 25 basis points to 3.75 percent, as widely expected — the lowest since September 2022 and the third cut in a row.
The vote was not unanimous: nine members supported the cut, two preferred to hold rates steady, and one argued for a larger 50-basis-point move.
The Fed said economic activity continues to expand at a moderate pace, while job gains have slowed and unemployment has edged higher. It also noted that inflation remains elevated.
Economic Projections
The Fed’s quarterly projection report included several key revisions:
• Economic growth: Raised to 1.7 percent for 2025 (from 1.6 percent), to 2.3 percent in 2026 (from 1.8), and to 2.0 percent in 2027 (from 1.9).
• Headline inflation: Lowered to 2.9 percent in 2025 (from 3.0), to a range of 2.4–2.6 percent in 2026, while keeping 2027 at 2.1 percent.
• Core inflation: Lowered to 3.0 percent in 2025 (from 3.1), to 2.5 percent in 2026 (from 2.6), and kept at 2.1 percent for 2027.
• Policy rate: The Fed kept its rate projections unchanged — 3.75 percent for 2025, 3.5 percent for 2026, and 3.25 percent for 2027.
Jerome Powell
Powell said there was “broad agreement” behind the decision, noting that most members supported a 25-basis-point cut and stressing that the Fed remains focused on price stability and maximum employment.
He added that the US economy continues to outperform peers in terms of inflation, labor-market health, and growth. Powell said the Fed does not view rate hikes as a likely scenario going forward, but will adjust policy as data and risks evolve.
Gold Outlook
Tim Waterer, chief market analyst at KCM Trade, said gold’s upside remains limited because the Fed’s underlying message was that any additional cuts would likely be very modest.
SPDR Gold Trust
Holdings at SPDR Gold Trust, the world’s largest gold-backed ETF, fell by 1.15 metric tons on Wednesday — the fourth daily decline — bringing total holdings to 1,046.82 metric tons, the lowest since 3 December.
