Tiny but vital metal markets rush to adjust to Chinese clampdown
A bigger clampdown looks set to have far-reaching ramifications for supply chains feeding American defense and chip-making industries.
Spot gold fell as traders viewed comments from Federal Reserve Chairman Jerome Powell as signaling the central bank likely won’t be aggressive in lowering U.S. interest rates further.
Policy makers voted, with two officials dissenting, to lower the target range for the benchmark rate by a quarter-percentage point to 2%-2.25%, delivering the first cut in over a decade. The shift was predicted by most investors and economists.
Powell, speaking at a press conference, said that the U.S. economy has shown resilience in recent weeks, and that the Fed’s move isn’t the start of a long series of rate reductions. He also said Wednesday’s rate decision was “intended to insure against downside risks” after weak global growth, trade policy uncertainty and muted inflation prompted a reassessment by the Fed.
Gold had benefited in recent months as central banks signaled easier monetary policy, with the metal touching a six-year high in July. Analysts and traders had been looking for affirmation from Powell that more cuts were in store to justify the run-up.
“Gold is not liking the fact of that one comment by him — that this is not the start of a long-term cycle of cuts,” Bob Haberkorn, senior market strategist at RJO Futures in Chicago, said by phone.
Bullion for immediate delivery slipped 0.9% to $1,418.11 an ounce at 3:06 p.m. in New York.
(By Joe Richter and Justina Vasquez)
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