Gold prices extended losses overnight and the dollar firmed after the US Federal Reserve cut interest rates by a quarter of a percentage point but dampened hopes for faster policy easing.
Spot gold dipped 0.1 per cent to $3,655.10 per ounce after hitting a record high of $3,707.40 on Wednesday. Gold futures for December delivery slipped 0.8 per cent to $3,689.80.
“The general message from the Fed was slightly to the hawkish side on interest rates, they didn’t really enthusiastically endorse lower rates,” said Edward Meir, a Marex analyst.
The dollar rose 0.3 per cent to extend gains against global currencies, gaining slightly against both the pound and euro.
The Fed reduced rates by 25 basis points on Wednesday to 4-4.25 per cent and indicated it will steadily lower borrowing costs for the rest of this year with two more cuts at most. The move comes as the Bank of England rate-setting committee prepares to meet at noon, with traders expecting policymakers to hold the base rate at 4 per cent amid stubbornly high inflation.