WASHINGTON (dpa-AFX) - Gold prices were mixed on Wednesday after reaching a new record high the previous day.
Spot gold edged up by 0.1 percent to $3,768.47 per ounce in European trade, while U.S. gold futures were down 0.4 percent at $3,800.62.
There is some profit booking as the dollar index recovered slightly after two consecutive days of declines.
Risk-off sentiment prevails in financial markets after Fed Chair Jerome Powell signaled a cautious approach to future rate cuts and stated that equity prices are currently 'fairly highly valued' by many measures.
Powell also said the Fed is facing a 'challenging situation' and that there is no risk-free path' to achieve the central bank's dual mandate of maintaining full employment and price stability in the U.S. economy.
Some Fed officials are becoming more concerned about growing risks to the labor market, while others remain primarily worried about the possibility that above-target inflation could be pushed higher by tariffs and other policies.
Fed Governor Michelle Bowman said policymakers are in danger of falling behind the curve and need to act decisively to bring down interest rates as the labor market weakens.
Fed Bank of Atlanta President Raphael Bostic said he sees more inflation coming, underscoring that the U.S. central bank needs to remain on guard.
His Chicago counterpart Austan Goolsbee said the Fed should be cautious toward additional interest-rate reductions.
In economic releases, a report on new home sales may garner some attention in the New York session ahead of the release of more closely watched data later in the week, including Friday's PCE index report, which is the Fed's preferred inflation measure.
On Tuesday, data showed U.S. business activity slowed for a second straight month in September, fuelling concerns about the economic outlook.
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