The Swiss National Bank voted to hold interest rates flat at the Decemebr 14 meeting at 1.75% for the second meeting, the highest since 2008, an expected decision. 

Gold prices rose in European trade on Thursday, extending gains for a second day and hitting a one-week high after trading above the psychological barrier of $2,000 as the dollar tumbles.

Gold's gains come following the Federal Reserve's policy meeting, at which it announced the end of the current cycle of policy tightening with discussions starting on the first interest rate cut in 2024. 

Gold Prices Today

Gold prices rose 0.6% to $2,039 an ounce, with a session-low at $2,024, after closing up 0.25% yesterday, the first profit in four days, and the largest since October 13. 

The Dollar

The dollar index fell 0.5% on Thursday on track for the third straight session, hitting four-month lows against a basket of major rivals. 

US 10-year treasury yields fell 1.9% to five-month lows, underpinning non-yielding assets.

Fed Meeting 

As expected, the Federal Reserve voted this week to maintain interest rates at below 5.5%, already the highest since 2001. 

The Fed said in its official statement that economic activities slowed down after strong growth in the third quarter, with the labor sector moderating a bit, while unemployment remains lower. 

The Fed believes inflation to still remain high, adding it'll continue to monitor data and conditions to gauge the appropriate policy response. 

Fed Chair Jerome Powell clearly said the Fed is close to ending the current cycle of policy tightening, but he left all options open. 

Economic Outlook 

The quarterly economic outlook report by the Fed had a few important revisions: 

The Fed expects 2.6% growth rate this year, up from 2.1% in September forecasts, while expecting 1.4% growth rate in 2024, down from 1.5% in September forecasts. 

The Fed expects total inflation at 3.2% this year, and 2.4% next year, down from 2.5%, while expecting a 2.2% inflation rate in 2025. 

As for core inflation, the Fed expects it at 3.2% this year, down from 3.7% in September forecasts, and 2.4% in 2024, down from 2.6% in previous forecasts. 

As for interest rates, the Fed changes prospects for US interest rates this year down from 5.75% to 5.5%, while expecting rates in 2024 at 4.75%, then at 3.75% in 2025. 

Powell

Fed Chair Jerome Powell said such stated outlook aren't a specified plan by the FOMC, but merely forecasts that will change as economic conditions develop. 

He said that inflation declined this year without an increase in unemployment, however the Fed will keep working until inflation is brought back to 2%. 

He added there's no sign so far that the US economy might fall into recession, however such a prospect remains possible nest year. 

He said Fed members have already starting discussing potential rate hikes for the first time.

US Rates

Following the meeting, the odds for a US 0.25% interest rate cut at the Fed March 2024 meeting surged to 87%, while odds for such a cut in May surged to 99%. 

The SPDR

Gold holdings at the SPDR Gold Trust rose 2.31 tonnes yesterday to a total of 877.96 tonnes, away from recent November 13 lows. 

The Federal Reserve voted to hold interest rates flat between 5.25% and 5.5% as expected. 

The Energy Information Administration reported a drop of 4.3 million barrels in US crude stocks last week to 440.8 million barrels, while analysts expected a drop of two million barrels.

Gasoline stocks rose 400 thousand barrels to 224 thousand barrels, as distillate stocks rose 1.5 million barrels to 113.5 million barrels.