Gold Holding Above $1,500 Ahead of Fed’s Interest Rate Decision

Ahead of the FOMC and the Fed’s rate decision, gold is trading steady and holding above the $1,500 level. At the time of writing, GOLD is trading at a little above $1,502.

Expectations for a rate cut being announced today continue to support gold prices, however don’t expect major moves until the official announcement. If the Fed cuts interest rates today, it would be for the second time this year, in order to support the US economy over escalating trade tensions with China.

When central banks lower interest rates, it increases the opportunity cost of holding investments in gold, making gold more appealing to investors. In addition, lower interest rates could weaken the dollar, at least in the short term, and gold shares a negative correlation with the currency.

Since May 2019, gold has gained nearly 19% on the back of leading central banks turning dovish as the global economic growth weakens. The precious metal’s bullishness has also been supported by the US-China trade war and escalating geopolitical tensions in the Middle East of late.

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ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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