- Gold dives as Fed Chair Jerome Powell revealed that tariffs reflection on prices would be slower, hinting steady rates.
- Fed holds rates steady, but Waller and Bowman dissent in favor of a cut.
- Statement cites moderated growth and “somewhat elevated” inflation; balance sheet runoff to continue.
Gold Price plummets sharply as the Fed Chair Powell leaned hawkish on remarks at its press conference, following the Federal Reserve’s decision to held interest rates unchanged though not unanimously. The XAU/USD sinks further below $3,300, down more than 1.30%.
During his press conference, the Fed Chair Jerome Powell said that the central bank has a long way to go, to know the impact of tariffs, adding that he expects to see more tariff impacts on data. Furthermore, stated “Tariff passthrough to prices may be slower than thought.”
On the statement, Fed officials expressed that growth of economic activity has moderated in the first half, though the unemployment rate remains low and inflation remains “somewhat elevated.”
The statement revealed the committee’s commitment to achieve maximum employment and inflation at a rate of 2% and acknowledged that “Uncertainty about the economic outlook remains elevated.”
Regarding the balance sheet reduction, the Fed revealed that they will continue to reduce its holding of Treasury securities, agency debt and agency mortgage-backed securities. Up next is the Fed Chair Jerome Powell press conference, at around 18:30 GMT.
Gold Price Forecast: Technical outlook
XAU/USD aimed above $3,300, but it has retreated somewhat, as US President Donald Trump is also crossing the wires, as he signed an executive order, setting Brazil tariffs on 50%. Further upside is seen above the day’s high at $3,334. On the flip side, the firs support is $3,288, with eyes set on the 100-day SMA at $3,250.