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Gold prices jumped in early trade yesterday after another emergency rate cut by the US Federal Reserve, before paring gains as some investors sold the metal for cash amid a sell-off in equities.
Spot gold was up 0,2 percent at $1 532,12 per ounce by 0726 GMT, having risen as much as 2,8 percent earlier. The metal fell 3 percent on Friday. US gold futures rose 1 percent to $1 531,60 per ounce.
Prices rose initially due to the surprise Fed rate cut, said CMC Markets analyst Margaret Yang Yan, adding that: “The market is very indecisive and there are divergent opinions. Investors are now dumping everything. They just want cash.” The Fed slashed rates back to near zero, restarted bond buying to help put a floor under a rapidly disintegrating global economy amid the escalating coronavirus pandemic. The Fed’s rate cuts and restarting of quantitative easing are positives for gold, but “we’re in an unconventional time and theory might not apply in a time of high volatility and divergence”, Yan said. – Reuters.
Online Reporter