New Delhi: The US Federal Reserve is expected to slash interest rates later on September 18, 2024. Gold prices have surged on multiple occasions this year owing to geopolitical tensions, investor fears that interest rates may remain higher for longer and policy changes.
A deeper rate cut is expected to weaken the US dollar, according to a Fujitomi Securities analyst. This may in turn direct investors to invest in the precious metal, driving up its demand.
Citing market trends, Saxi Bank’s head of commodity strategy, Ole S Hansen, stated that demand for gold-backed ETFs may rise as the opportunity cost of holding gold declines.
How will gold prices react to a lower rate cut?
If the US Fed slashes the policy rate by 25 basis points, gold prices may witness some value decline, CNBCTV18 reported, citing Bloomberg and Goldman Sachs’ analysts. To be sure, this is expected to be a temporary development and gold prices may eventually rise to to $2,700 per ounce, according to Goldman Sachs’ analysts.
This is a developing story. More to follow
Gold prices may surge if the US Fed commentary hints at a potential economic slowdown. The quantum of the rate cut may also affect gold prices. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
