Gold on Fire After Fed’s Rate Cut Decision Heightens Risk-off Sentiment in Global Markets

Gold prices continue to trade bullish after rising by more than 3% in the previous session after the US Federal Reserve delivered a surprising rate cut by 50bp in the wake of the global coronavirus outbreak. At the time of writing, GOLD is trading at a little above $1,642.

The Fed’s extremely dovish move offered strong support to the safe haven appeal of gold, even as it served to weaken the US dollar, giving the precious metal an additional boost. On Tuesday, the Fed announced the rate cut to offset any possible impact on the US economy from the rapidly spreading coronavirus.

In addition to the Fed decision, G7 finance ministers and central bank officials have also pledged to take necessary steps to mitigate economic risks from the outbreak, raising the risks of a possible recession in the global economy. The risk-off sentiment in the markets has driven global equities lower while safe haven instruments remain in favor, supporting gold prices.

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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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