Advertisements
Home Gold Prices Rate Cut Debate Fuels Gold’s Continued Rally

Rate Cut Debate Fuels Gold’s Continued Rally

by anna

Gold extended its rally during Friday’s Asian trading session, driven by renewed debate over whether the Federal Reserve will opt for a 0.50% or 0.25% interest rate cut at its upcoming meeting. Earlier in the week, core inflation data from the Consumer Price Index (CPI) had dimmed hopes of a larger 50 basis point rate cut. However, an article by The Wall Street Journal Fed Watcher Nick Timiraos, along with remarks from former New York Fed President William Dudley, reignited the possibility of a more aggressive cut.

This speculation led to a dip in U.S. Treasury yields, a weakening of the U.S. Dollar, and further gains in gold prices.

Advertisements

Why Lower Rates Boost Gold

Lower interest rates are typically bullish for gold, as they reduce the opportunity cost of holding the non-yielding asset, making it more attractive to investors seeking safe-haven alternatives amid market volatility.

Advertisements
Advertisements

You may also like

Lriko logo

Lriko is a gold portal website, the main columns include gold pricespot goldsilver pricespot silvergold futures, nonfarm payroll, gold basics, gold industry news, etc.

© 2023 Copyright  lriko.com