Gold prices reach historic highs following Fed’s interest rate cut
Date
9/22/2024 5:04:19 AM
(MENAFN) Following the unexpected decision by the US Federal Reserve to implement a more substantial rate cut than anticipated, Gold prices surged to historic highs on Friday. As of 0750 GMT, the price of gold reached approximately USD2,607 per ounce, marking an increase of around 1 percent compared to the previous day. This significant rise in gold prices reflects market reactions to the Fed's monetary policy changes and investor sentiment favoring precious metals amid economic uncertainty.
The Federal Reserve announced a reduction in interest rates by 50 basis points on Thursday, which was nearly double what market analysts had predicted. This move was seen as a proactive measure to stimulate the economy, and it has contributed to a shift in investor focus toward gold and other safe-haven assets. Historically, lower interest rates tend to diminish the opportunity cost of holding non-yielding assets like gold, making them more attractive to investors seeking to preserve wealth.
In addition to gold, the price of silver also experienced a notable increase on Friday. Silver prices rose by approximately 1.3 percent from Thursday, reaching USD31.18 per ounce. This uptick in silver prices further underscores the broader trend in precious metals following the Fed's announcement. As both gold and silver gain traction in the market, investors are likely assessing the implications of the Fed's actions for their investment strategies.
The broader context of these price movements reflects ongoing economic challenges and uncertainties. As central banks around the world adjust their policies in response to shifting economic conditions, the demand for precious metals, particularly gold and silver, tends to rise. This environment of lower interest rates and heightened volatility can drive investors to seek refuge in safe-haven assets, further bolstering prices in the commodities market.
MENAFN22092024000045015839ID1108700804
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.