Gold Hits Record High as Fed Signals Rore Rate Cuts

Gold rose to a record USD 4,193 per ounce early Wednesday after Federal Reserve Chair Jerome Powell reinforced expectations of further US rate cuts this year. The US dollar weakened to CHF 0.8010 and JPY 151.7, while the euro strengthened to USD 1.1606 after France suspended its 2023 pension reform. Oil prices slipped, with Brent crude down to USD 62.30 per barrel, as investors focused on the International Energy Agency’s warning of a potential supply surplus next year and renewed US–China trade tensions.

Equities

London’s FTSE 100 closed 0.1% higher on Tuesday, recovering earlier losses as gains in consumer stocks outweighed declines among industrial miners. The domestically focused FTSE 250 slipped 0.16%.

Homebuilders were among the strongest performers after the government announced planning reforms aimed at speeding up housing construction. Bellway rose 5.3% after beating full-year pretax profit expectations, raising its dividend, and unveiling a £150 million share buyback. Persimmon added 2.6% and Berkeley climbed 2.4%, also benefiting from the positive sentiment in the sector.

EasyJet jumped 8%, making it the top performer on the FTSE 100, following media reports that global shipping group Mediterranean Shipping was considering an acquisition of the airline.

Among the laggards, Anglo American fell 2.8% and Glencore declined 1.1% as softer copper prices weighed on the mining sector. BP slipped 1.3% after the energy giant reported weaker oil trading performance, though it said upstream output had grown.

The International Monetary Fund slightly raised its 2025 growth forecast for the UK but lowered its outlook for 2026, warning that Britain is set to have the highest inflation among major advanced economies over both years. Meanwhile, official data showed a modest slowdown in wage growth during the three months to August, suggesting that the Bank of England could continue easing monetary policy gradually. Markets are currently pricing in the next rate cut for April 2026.

On Wall Street, trading ended mixed on Tuesday as strong quarterly results from major US banks contrasted with renewed tensions in the US–China trade dispute. The Dow Jones Industrial Average rose 0.44% to 46,270.46 points, supported by gains in industrial stocks. The S&P 500 slipped 0.16% to 6,644.31, while the Nasdaq fell 0.76% to 22,521.70.

Wells Fargo climbed 7.15%, its biggest one-day gain since November 2024, after beating profit forecasts. Citigroup rose nearly 4% on record quarterly revenue, while JPMorgan Chase and Goldman Sachs both fell about 2% despite exceeding Wall Street expectations.

BlackRock advanced over 3% after reporting record assets under management of $13.46 trillion. Caterpillar gained 4.5% after JPMorgan raised its price target. Walmart added 5% after announcing a partnership with OpenAI that will allow customers and Sam’s Club members to shop directly through ChatGPT.

Forex & Commodities

The US dollar fell on Tuesday against major peers as renewed trade tensions between Washington and Beijing unsettled markets. It slipped to CHF 0.8010 and JPY 151.7, reversing Monday’s gains, while the euro strengthened to USD 1.1606 after the French government said it would suspend a major pension reform until after the 2027 election. Sterling eased to USD 1.3326 after data showed slower UK wage growth and a rise in jobless claims, with the pound also weaker against the euro at GBP 0.8708. The softer data reinforced expectations that the Bank of England will maintain a gradual approach to rate cuts, while the euro gained support from the perception of looser fiscal policy in France.

Gold extended its record-breaking run early on Wednesday, climbing to an all-time high of USD 4,193 per ounce before easing slightly to USD 4,185. Prices were lifted by growing expectations of further US rate cuts and by safe-haven demand amid political uncertainty. Federal Reserve Chair Jerome Powell said the US economy “may be on a somewhat firmer trajectory than expected” but confirmed that monetary policy decisions would remain data-dependent. Investors are pricing in quarter-point cuts in both October and December, supporting demand for non-yielding assets.

Oil prices edged lower on Wednesday, extending losses from the previous session. Brent crude fell to USD 62.30 per barrel and US West Texas Intermediate to USD 58.67. The decline followed a warning from the International Energy Agency that the global market could face a supply surplus of up to four million barrels per day in 2026. Ongoing trade tensions between the US and China also weighed on sentiment, with both countries imposing new port fees on cargo shipments, raising costs and fuelling concerns about weaker demand.