Gold News – 19.Sep.2024

Gold News

Gold (XAUUSD) hit a new record high of $2,600 per ounce after the Federal Reserve’s interest rate cut, but quickly dropped to $2,555, erasing its intraday gains.

Despite the brief dip, gold remains in a bull market, with over 25% gains this year, outperforming the S&P 500.

The Federal Reserve cut interest rates by 50 basis points, which is generally favorable for gold, as lower rates reduce the opportunity cost of holding non-yielding assets like gold.

Lower interest rates make fixed-income assets like bonds less attractive, and weaken the US dollar, further boosting gold’s appeal.

The Fed’s 50 bps cut was its first since early 2020, aimed at addressing soft inflation and a potential labor market slowdown, with more cuts possibly on the way.

Despite this, Fed Chair Jerome Powell emphasized that the Fed is not rushing to ease policy further and that interest rate projections should not be taken as a policy plan.

Author : Arman Shaban
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