FX.co ★ Gold Extends Record Setting Run After Fed

Gold surged by over 2% on Wednesday, nearing $5,300 per ounce, as it continued to reach new heights. This increase was driven by a weaker US dollar, increased policy uncertainty, and the Federal Reserve's steady stance, all of which continue to boost the allure of safe-haven assets. The upward trend gained further momentum after President Trump downplayed the dollar's recent decline to its lowest level in four years, indicating an acceptance of currency weakness amidst ongoing tariff threats and renewed critiques of the Federal Reserve's independence. This environment sustained a pricing in of geopolitical and policy risks. As anticipated, the Federal Reserve maintained interest rates between 3.50% and 3.75%, noting robust economic activity and signs of labor market stabilization, while emphasizing that inflation remains elevated and uncertainty regarding the economic outlook persists. The decision, which wasn't unanimous—with two policymakers advocating for an immediate rate cut—strengthened the likelihood of potential easing measures later this year. This, coupled with continuous central-bank purchasing and inflows into ETFs, bolstered the appeal of gold.