Comex Gold Hits Record High Following Fed Rate-Cut Decision

Comex gold hit a new all-time intraday high Wednesday after the Federal Reserve cut its benchmark interest rate for the first time in some four years.

Comex gold for December 2024 delivery rose some 1.3% to a record $2,626.80 an ounce shortly before 2:45 p.m. ET after the Fed's eased the target Federal Funds rate to a 4.75%-5.25% range – down 50 basis points.

Markets had generally only expected the Fed to ease by 25 basis points as part of a bid to juice up the U.S. economy amid potentially slowing job growth and moderating inflation.

The Fed had kept interest rates rising or at high levels for more than two years after inflation shot up in following the COVID-19 pandemic.

However, increasing signals in recent weeks that the Fed would reverse gears and cut rates had sent gold prices higher amid a belief that the central bank would end its hawkish inflation stance.

Investors traditionally use gold as an inflation hedge, so higher inflation risks can send the metal’s price higher.

Additionally, lower U.S. interest rates typically weaken the dollar by making American bonds and money markets less desirable to foreign investors.