- December 12, 2025
- Posted by: EWGFX
- Category: news
Gold: Breaks higher on dovish FOMC outcome
Performance: Moves out of consolidation range
Buoyed by a dovish FOMC outcome, spot gold surged on December 11 extending its gains to the second day. At the time of writing this article, spot gold was trading with a gain of 1.3 per cent at $4282.
The MCX February gold contract was changing hands at Rs 132,502, up 2.02 per cent for the day.
Gold also benefitted on a slump in Oracle shares as the company’s spending in fiscal 2026 Q2, driven by capex in data centres and other equipment, exceeded the forecast ($12 billion vs the estimate of $8.25 billion) and raised doubts about profit generation. Oracle’s credit risk surged to a fresh 16-year high.
FOMC decision: Fiscal dominance apparent
As widely expected, the US Federal Reserve cut the Fed Fund rate by 25 bps to 3.5 per cent-3.75 per cent on December 10, in a 9-3 vote. FOMC, signalling a brief pause said. that it will consider the extent and timing of additional adjustments. The Fed said to address money market tightness, it will start buying $40 billion of treasury bills/month from December 12, as a reserve management strategy. Its T bill buying plan coupled with the Fed Chair Powell’s presser in which he expressed grave concerns over the job market have been construed as dovish by investors. Buying Treasury bills is a direct support to the profligate US Government; a fiscal dominance policy is becoming quite apparent. Although, technically, T-bill buying plan is not a QE as it does not extend duration and as per the Fed it is not an economic stimulus, however, ending QT and starting T-bill purchases is a liquidity-friendly approach.