The Gold value remained just about unaffected by the US Federal Reserve’s financial coverage resolution on Wednesday night, Commerzbank’s Head of FX and Commodity Analysis Thu Lan Nguyen notes.
Prospect of decrease US rates of interest stays supportive for Gold
“The choice to depart rates of interest unchanged got here as little shock. The truth that the FOMC members’ rate of interest projections additionally remained unchanged was in all probability extra decisive. The bulk proceed to anticipate two rate of interest cuts over the course of the 12 months.”
“That is roughly in step with present market expectations (primarily based on Fed Funds Futures) and was subsequently additionally nothing new. It’s true that seven of the 19 members now anticipate no rate of interest cuts in any respect this 12 months, in comparison with 4 beforehand.”
“However even this hawkish shift got here as little shock to most market individuals, as they themselves have considerably lowered their rate of interest expectations since Could. In precept, nonetheless, the prospect of decrease US rates of interest stays a supportive issue for Gold, even whether it is unlikely to result in one other sharp rise in costs.”
