Gold prices fall for sixth consecutive day: Here's why
What's the story
Gold prices have witnessed a decline in the early Asian session on Thursday, falling below $4,850. The precious metal has now dropped for six straight days—the longest losing streak since late 2024. The fall comes after Federal Reserve Chair Jerome Powell indicated that rising energy prices would contribute to overall inflation, lowering expectations of a rate cut in the near future.
Rate hold
Fed held interest rates steady at March meeting
The Federal Reserve kept interest rates unchanged at its March meeting, maintaining the benchmark Federal Funds Rate in a target range of 3.5% to 3.75%. This is the second consecutive meeting with no change as policymakers navigate economic uncertainty due to an ongoing war between US-Israel and Iran and persistent inflation. The central bank still expects one cut this year, even though traders are pulling back their bets for rate reductions in 2026.
Market response
Powell focuses on dual mandate, keeps rates restrictive
Nicky Shiels, head of metals strategy at MKS PAMP SA, said Powell has "somewhat walked back the statement, which wasn't as hawkish as feared." However, he is focusing on the dual mandate and keeping rates restrictive for longer. Meanwhile, escalating tensions in the Middle East could boost safe-haven flows benefiting precious metals like gold.