• Gold stabilizes at $2,305, down 0.60% amid positive sentiment, lower US Treasury yields, softer USD.
• Fed holds fed funds rate, tweaks to QT program influence market dynamics.
• Chair Powell urges caution on rate changes pending clearer inflation progress.

Gold price clings to the $2,300 figure in the mid-North American session on Thursday amid an upbeat market sentiment, falling US Treasury yields, and a softer US Dollar. Traders are still digesting Wednesday’s comments of the Federal Reserve’s Chairman, Jerome Powell, and the US central bank's decision to hold rates unchanged. Meanwhile, data showed the US trade deficit narrowed a tick, and the labor market is still tight.

The XAU/USD trades at $2,305, down by 0.60%. Market participants expected a more hawkish tilt by the Fed, which remained neutral. The central bank delivered a neutral monetary policy statement and announced that it would reduce the pace of its Quantitative Tightening (QT) program.

During his press conference, Fed Chair Jerome Powell said it wouldn’t be appropriate to cut rates until they have confidence that inflation is trending toward its 2% goal, adding that this year's inflation data “has not given us that greater confidence.” They would decide monetary policy “meeting by meeting,” while adding that slowing the pace of balance sheet runoff “will ensure a smooth transition for money markets.”

He added the Fed’s belief that monetary policy is sufficiently restrictive to curb inflation and disregarded the potential of hiking rates when asked.

On Wednesday, the Federal Reserve opted to maintain the federal funds rate at 5.25%- 5.50%. In their statement, they noted that the risks associated with achieving the Fed's dual mandate, which focuses on employment and inflation, have become more balanced over the past year. Despite acknowledging progress on inflation, they also recognized that recent data suggest this progress has stalled.