Gold price surpassed its previous all-time high and reached a new record level of $2,570 per troy ounce on Friday, supported by expectations that the US Federal Reserve will cut interest rates aggressively, Commerzbank’s Commodity Analyst Carsten Fritsch notes.
Expectations of large Fed rate cuts support Gold
“The driving factor is the marked increase in rate cut expectations since yesterday. It should be noted that the core index of US consumer prices rose slightly more than expected in August, which should make a 50 basis point rate cut by the Fed less likely in the coming week. The Fed Funds Futures are currently pricing in a probability of around 45% for this.”
“However, the market is still expecting the Fed to cut interest rates by around 100 basis points by the end of the year, i.e. rates would have to be cut by 50 basis points at one of the two remaining meetings after September. According to Fed funds futures, a further 100 basis points are then expected to follow by mid-2025. It is therefore likely due to these aggressive interest rate cut expectations for the coming months that the Gold price is rising.”
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
Hot
No comment on record. Start new comment.