Gold Hits New Highs Post-FOMC Decision
After the Federal Reserve’s recent 50-basis-point interest rate cut, the price of Gold has surged to unprecedented levels. This surge is a result of market expectations of further interest rate cuts in the near future, with a potential additional 50 basis points cut anticipated in either November or December, as indicated by Fed Funds Futures.
Market Analysis by Commerzbank’s Analyst Carsten Fritsch
- Gold price hits a record high of over $2,600 per troy ounce following the rate cut announcement.
- Fed Chairman Powell’s emphasis on rate cuts being exceptions doesn’t deter market sentiment.
Market Expectations and Gold’s Upward Trajectory
Market expectations currently price in a total of 75 basis points in interest rate cuts by the end of the year. With two upcoming meetings, the likelihood of a 50 basis points cut in either November or December is higher, with December being slightly favored by the market.
As long as these expectations persist, the upward trend in Gold is expected to continue. However, Commerzbank anticipates smaller 25 basis points cuts at each meeting, suggesting that the Gold rally may not be sustained indefinitely.
Analysis of Gold’s Performance Post-FOMC Decision
The surge in Gold prices following the Federal Reserve’s interest rate cut reflects market sentiment and expectations of further cuts. The following key points can be noted:
- Gold price hits a new high of over $2,600 per troy ounce.
- Market anticipates additional interest rate cuts of 50 basis points either in November or December.
- Market optimism regarding rate cuts drives Gold’s upward trajectory.
- Commerzbank predicts smaller 25 basis points cuts at each meeting, signaling a potential slowdown in Gold’s rally.