Gold prices are currently awaiting the Federal Reserve’s decision on interest rates. Although Gold has dropped slightly from its recent high, experts believe it could reach new records if certain conditions are met. Carsten Fritsch, a commodity analyst at Commerzbank, shares insights on what could push Gold prices higher.
Gold Market Overview
Gold recently hit a high of $2,590 per troy ounce earlier this week. However, the price has dropped about $20 from that peak. The rise to these high levels was mainly driven by the expectation that the US Federal Reserve would announce a significant interest rate cut.
How Interest Rate Cuts Affect Gold
Investors are expecting the Federal Reserve to cut interest rates by 50 basis points. According to market data, there is a 60% chance of this happening. However, if the Fed only cuts rates by 25 basis points, it might disappoint investors, causing Gold prices to drop.
Gold’s Future Depends on Fed’s Decisions
For Gold to hit new record highs, the Fed would need to cut rates by 50 basis points. Additionally, they would need to clearly signal further rate cuts in the future. If these signals are not clear, Gold’s rise may be limited, but the price should not fall too much either.
Conclusion
The Federal Reserve’s decision on interest rates is crucial for Gold prices. If they signal more rate cuts, Gold could break its current records and set new all-time highs.
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