Gold extends decline as dollar strengthens after fed’s rate cut

September 18, 2025 (MLN): Gold prices slipped further on Thursday as a firmer U.S. dollar weighed on the market, following the Federal Reserve’s widely expected decision to trim interest rates by 25 basis points while signaling a cautious stance on future easing.

Spot gold was down 0.82% at $3,658.56 an ounce as of [12:52 pm] PST, according to data reported by Mettis Global.

December U.S. gold futures dropped 1.2% to settle at $3,671.30 per ounce.

“The Fed’s tone leaned slightly hawkish it wasn’t a strong endorsement of additional rate cuts,” said Edward Meir, analyst at Marex. “That pushed the dollar higher, lifted Treasury yields, and left gold looking a bit stretched. We could see prices dip back toward the $3,600 level in the short term.”

The U.S. dollar climbed 0.4%, extending its advance against major peers and making bullion less attractive for non-dollar investors.

The Fed’s rate reduction, on Wednesday, was framed by Chair Jerome Powell as a precautionary move amid signs of labor market weakness.

Powell stressed the central bank would take a “meeting-by-meeting” approach to further decisions.

Traders, meanwhile, see a 90% probability of another quarter-point cut in October, up from 74.3% before the meeting, CME’s FedWatch tool showed.

Across the Atlantic, the Bank of England is expected to hold its benchmark rate steady at 4% when it delivers its policy update later on Thursday.

Investor appetite for bullion also softened, with SPDR Gold Trust the world’s largest gold-backed ETF reporting a 0.44% decline in holdings to 975.66 tonnes on Wednesday from 979.95 tonnes a day earlier.

In other precious metals, spot silver slipped 0.6% to $41.40 per ounce, platinum edged up 0.5% to $1,371.60, while palladium eased 0.2% to $1,152.24.

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