🔺 What to do when markets are at an all-time high? Find smart bargains, like these.See Undervalued Stocks

PRECIOUS-Gold hits near 6-year high after Fed signals rate cut

Published 06/21/2019, 01:53 AM
PRECIOUS-Gold hits near 6-year high after Fed signals rate cut
XAU/USD
-
XAG/USD
-
GC
-
SI
-
DXY
-
XAU/AUD
-

* Fed holds rates steady, signals potential cuts
* Gold priced in Australian dollars hits all-time peak
* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl

(Adds comments, graphics, updates prices)
By Karthika Suresh Namboothiri
June 20 (Reuters) - Gold prices surged to a near six-year
peak on Thursday after the U.S. Federal Reserve bank signaled it
was ready to cut interest rates as early as next month to boost
growth, triggering a sharp fall in the dollar.
Spot gold XAU= jumped 2.2% to $1,390.38 per ounce by 1:32
p.m. EDT (1732 GMT). Prices touched $1,392.84, their highest
since early September 2013.
U.S. gold futures GCcv1 settled 3.6% higher at $1,396.90
per ounce.
"More than the actual impact itself, was the shift in
expectations," said Ryan Giannotto, Director of Research at
GraniteShares with reference to the Fed's statement.
"Expectations were very high for the Fed and the market was
forecasting this. But the real risk was that it would not
satiate investors' demand for dovishness."
Lower interest rates decrease the opportunity cost of
holding non-yielding bullion and weigh on the dollar, making
gold cheaper for investors holding other currencies.
The Fed on Wednesday signalled interest rate cuts beginning
as early as July, saying it is ready to battle growing global
and domestic economic risks as it took stock of rising trade
tensions and growing concerns about weak inflation. Top Chinese and U.S. officials will resume trade talks in
accordance with the wishes of their leaders, after negotiations
to reach a broad trade deal broke down last month. "Gold has been supported of late by trade and growth
uncertainties, which weakened the U.S. Dollar, caused bonds to
rally and spurred equity market volatility," UBS analysts said
in a note.
"The Fed's dovish pivot on interest rates has pushed the
gold price to a 5-year high and toward the $1,400/oz mark."
The dollar fell 0.5% against a basket of its rivals .DXY
to 96.64, putting it on course for its biggest two-day drop
since February 2018. USD/
Gold in Australian dollars XAUAUD=R was at an all-time
high.

"We believe the bullish market mood points to a short-term
consolidation but still see the longer-term recovery on track.
Later this year, gold should benefit from a weakening US dollar,
followed by returning safe-haven demand next year," Julius Baer
analyst Carsten Menke said in a research note.
Silver XAG= was up 2% to $15.46 per ounce, its highest in
over 12 weeks. Platinum XPT= dropped to $808.00 per ounce and
palladium XPD= declined 0.8% to $1,488.50.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
GRAPHIC-Gold in AUD, JPY https://tmsnrt.rs/2RoLbHD
GRAPHIC-Gold in EUR, Sterling https://tmsnrt.rs/31Ktp6u
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.