Gold prices extended losses on Wednesday after Federal Reserve Chair Jerome Powell signaled the central bank is in no hurry to adjust interest rates, even amid ongoing trade tensions spurred by former President Donald Trump.
Speaking at a press conference following the Fed‘s policy meeting, Powell said the current level of interest rates remains appropriate and that officials are taking a wait-and-see approach. “We’re in the right place to wait and see how things evolve,” he stated.
The Federal Open Market Committee unanimously voted to keep the benchmark federal funds rate unchanged in the 4.25% to 4.5% range, where it has stood since December.
Powell acknowledged that if the steep tariff increases recently announced are sustained, they could stoke inflation, curb economic growth, and push unemployment higher. However, he offered no indication of imminent policy changes.
The U.S. dollar strengthened following Powell’s remarks, adding pressure to gold, which is priced in dollars. The Fed chief’s cautious stance on rate cuts weighed on bullion, which typically benefits from a lower interest rate environment.
Earlier in the day, spot gold fell as much as 2.1% after both China and the U.S. confirmed upcoming trade negotiations, diminishing demand for traditional safe-haven assets. Despite the recent pullback, gold remains up roughly 28% year-to-date, buoyed by investor anxiety over market volatility triggered by Trump’s aggressive trade and geopolitical stances. The metal reached a record high above $3,500 an ounce in April before retreating in recent weeks. Speculative demand from China and continued central bank buying have also fueled its rally.
As of 3:28 p.m. in New York, spot gold was down 1.7% at $3,373.04 an ounce. The Bloomberg Dollar Spot Index rose 0.5%. Silver, platinum, and palladium also declined.
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