Gold soars to record high after Fed holds rates steady, signals two cuts in 2025

By Daksh Grover and Brijesh Patel

(Reuters) - Gold prices soared to an all-time high on Wednesday, following remarks from Fed Chair Jerome Powell and as the U.S. Federal Reserve held interest rates steady as anticipated, but signaled a possible reduction in borrowing costs by half a percentage point by the end of this year.

Spot gold rose 0.5% to $3,047.80 per ounce as of 03:57 p.m. ET (1957 GMT), after hitting an all-time high of $3,051.99 earlier in the session.

U.S. gold futures settled mostly unchanged at $3,041.20.

"Gold rallies to another historic high after a truly virtuoso performance by Chair Powell - as stocks and bonds also rally," said Tai Wong, an independent metals trader. [.N]

"Gold is in a bull market after surging strongly above $3000 and will continue to move higher on 'elevated' uncertainty and fear of higher inflation."

"The market is thinking, buy gold no matter what," he added.

The Fed maintained its policy rate between 4.25% and 4.50%. Officials adjusted their inflation outlook upward for this year, while simultaneously downgrading the forecast for economic growth, following the Trump administration's implementation of tariffs.

Powell said on Wednesday that inflation could face delays in progress this year, partly due to tariffs from the Trump administration.

U.S. President Donald Trump raised tariffs on imports of steel and aluminium to 25%, effective last week, and has said he intends for new reciprocal and sectoral tariffs to take effect on April 2.

Gold, traditionally viewed as a safe-haven investment during times of inflation or economic volatility, has climbed over 15% so far this year. 

Fed fund futures imply traders see a 66% chance of the Fed resuming rate cuts in the June meeting, up from 57% before the decision. Gold becomes more attractive when interest rates are low, as it is a non-yielding asset.

On the geopolitical front, Russia and Ukraine accused each other of violating a new agreement to refrain from attacks on energy targets just hours after U.S. President Donald Trump spoke by phone with Russia's Vladimir Putin.

Spot silver fell 0.7% to $33.79 an ounce, platinum slipped 0.3% to $994.15 and palladium fell 0.8% to $959.54.

(Reporting by Daksh Grover and Brijesh Patel in Bengaluru; Additional reporting by Sherin Varghese; Editing by Joe Bavier, Chris Reese, Vijay Kishore and Mohammed Safi Shamsi)