Gold price tumbled over 1.50% on Wednesday after the Federal Reserve, decided to hold rates unchanged, on a 9-2 split vote. Fed Chair Jerome Powell's leaning hawkish at the press conference, alongside strong Gross Domestic Product (GDP) figures for Q2 2025, weighed Bullion prices. At the time of writing, XAU/USD trades below $3,280 after hitting a high of $3,334.

Risk appetite turned sour after the Fed Chair Jerome Powell pushed back against a rate cut at the September 16-17, adopting a meeting-by-meeting approach. This and uncertainty of when inflation would show tariffs effect on prices, sponsored Gold's next leg down, below $3,300 toward the daily low of $3,268.

"Tariff passthrough to prices may be slower than thought," Powell said.

Meanwhile, the Fed monetary policy statement revealed that growth of economic activity has moderated in the first half, though the unemployment rate remains low and inflation remains "somewhat elevated."

The statement revealed the committee's commitment to achieve maximum employment and inflation at a rate of 2% and acknowledged that "Uncertainty about the economic outlook remains elevated."

Data released earlier, showed that Gross Domestic Product (GDP) in the second quarter of the US. Although the print is positive, the report showed that consumer spending weakened and business investment slowed sharply. Reuters revealed that most economists estimate GDP for the full year at 1.5%, below the 1.8% foreseen by the Fed.

Other data showed that private hiring resumed, according to the ADP National Employment Change in July.

The CME FedWatch Tool indicates that markets are pricing in a 45% 60% chance of a 25-basis-point rate cut by the Fed at the September 17 meeting, down from 60% before the Fed's decision.

The docket for the remainder of the week will feature core Personal Consumption Expenditures (PCE), Initial Jobless Claims, Nonfarm Payrolls (NFP) figures and the ISM Manufacturing PMI.

Source: Fxstreet