Gold Prices Rebound After US Federal Reserve Rate Cut
On Thursday, December 11, gold prices made a strong comeback after being stuck in a tight range for several trading sessions. This rebound happened after the US Federal Reserve cut interest rates, which led to increased demand for safe-haven assets like gold.
US Federal Reserve's Rate Cut
The Federal Reserve cut interest rates by a quarter of a percentage point, which is the third reduction this year. This move brought the policy rate to its lowest level in over three years, ranging from 3.50% to 3.75%. The February futures contract on the Multi Commodity Exchange (MCX) opened higher at ₹1,30,250 per 10 grams, compared to the previous close of ₹1,29,796.
Gold Market Reaction
By 8:30 PM IST, MCX gold was trading ₹1,159, or 1.12%, higher at ₹1,34,243 per 10 grams. The spot gold price also rose 0.20% to $4,234 per ounce. The gold market is gaining momentum as the Federal Reserve's rate cut follows its final monetary policy meeting of the year.
Federal Reserve's Outlook
The Federal Reserve did not signal any aggressive easing of monetary policy through 2026. In fact, most policymakers anticipate only one rate cut in 2026. The Fed's latest policy statement remained largely similar to the one issued after the October meeting. Investors are now waiting for the next clues on the Fed's move, which may come from November's non-farm payrolls and unemployment rate data, due on December 16.
Economic Projections
The Federal Reserve expects a modest pickup in economic activity next year, with GDP growth projected at 2.3% for 2026, higher than the 1.8% estimate issued in October. Growth is forecast at 2.0% for 2027, slightly above the previous 1.9% projection, while the 2028 estimate remains unchanged at 1.9%.
Key highlights:
- Gold prices rebound after US Federal Reserve rate cut
- MCX gold trading higher at ₹1,34,243 per 10 grams
- Spot gold price rises 0.20% to $4,234 per ounce
- Federal Reserve expects modest economic growth in 2026
Note: Investors are advised to consult certified experts before making any investment decisions.