Gold Slides After Fed Cuts Rates; Traders Seek Direction

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By Barani Krishnan

Investing.com – slipped Wednesday after the executed a widely anticipated that boosted the and left longs in the yellow metal clueless on immediate direction.

The Fed announced the second U.S. interest-rate cut for this year, trimming rates by 25 basis points, as did in July.

U.S. for December delivery settled up $2.40, or 0.2%, at $1,515.80 per ounce on the Comex division of the Mercantile Exchange, before the Fed announcement.

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At 3:15 PM ET (19:15 GMT), the contract traded at $1,497.15 an ounce, down $16.25, or 1.1%.

, reflective of trades in bullion, shed $12.30, or 0.8%, to stand at $1,489.09.

Gold’s weakening after the rate-cut announcement correlated with the strength of the , which was up 0.4% at 98.21,

“This short-term gold pullback is mainly due to the rise,” George Gero, precious metals analyst at RBC Wealth Management in New York, said in an e-mail.

“Gold pulled back somewhat as the quarter point was an expected cut, with no assurance down the road for more cuts,” Gero said. “Tomorrow’s index option expiration may add to the volatility in . This short-term gold pullback is mainly due to the rise.”

Since the start of September, gold has shown little of the charm displayed in the -August stretch, when it effortlessly hit six-year highs and seemed at one point ready to hit $1,600. That said, bullion is still up about 16% on the year, while show a 14% gain.

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Source: Investing.com