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PRECIOUS-Gold hits near 6-year high after Fed signals rate cut


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* Fed holds rates steady, signals potential cuts

* Gold priced in Australian dollars hits all-time peak

* GRAPHIC-2019 asset returns: http://tmsnrt.rs/2jvdmXl (Adds comments, graphics, updates prices)

By Karthika Suresh Namboothiri

June 20 (Reuters) - Gold prices surged to a near six-yearpeak on Thursday after the U.S. Federal Reserve bank signaled itwas ready to cut interest rates as early as next month to boostgrowth, triggering a sharp fall in the dollar.

Spot gold XAU= jumped 2.2% to $1,390.38 per ounce by 1:32p.m. EDT (1732 GMT). Prices touched $1,392.84, their highestsince early September 2013.

U.S. gold futures GCcv1 settled 3.6% higher at $1,396.90per ounce.

"More than the actual impact itself, was the shift inexpectations," said Ryan Giannotto, Director of Research atGraniteShares with reference to the Fed's statement.

"Expectations were very high for the Fed and the market wasforecasting this. But the real risk was that it would notsatiate investors' demand for dovishness."

Lower interest rates decrease the opportunity cost ofholding non-yielding bullion and weigh on the dollar, makinggold cheaper for investors holding other currencies.

The Fed on Wednesday signalled interest rate cuts beginningas early as July, saying it is ready to battle growing globaland domestic economic risks as it took stock of rising tradetensions and growing concerns about weak inflation. urn:newsml:reuters.com:*:nL2N23R01O

Top Chinese and U.S. officials will resume trade talks inaccordance with the wishes of their leaders, after negotiationsto reach a broad trade deal broke down last month. urn:newsml:reuters.com:*:nL4N23R25U

"Gold has been supported of late by trade and growthuncertainties, which weakened the U.S. Dollar, caused bonds torally and spurred equity market volatility," UBS analysts saidin a note.

"The Fed's dovish pivot on interest rates has pushed thegold price to a 5-year high and toward the $1,400/oz mark."

The dollar fell 0.5% against a basket of its rivals .DXY to 96.64, putting it on course for its biggest two-day dropsince February 2018. USD/

Gold in Australian dollars XAUAUD=R was at an all-timehigh.

"We believe the bullish market mood points to a short-termconsolidation but still see the longer-term recovery on track.Later this year, gold should benefit from a weakening US dollar,followed by returning safe-haven demand next year," Julius Baeranalyst Carsten Menke said in a research note.

Silver XAG= was up 2% to $15.46 per ounce, its highest inover 12 weeks. Platinum XPT= dropped to $808.00 per ounce andpalladium XPD= declined 0.8% to $1,488.50.

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GRAPHIC-Gold in AUD, JPY   https://tmsnrt.rs/2RoLbHD
GRAPHIC-Gold in EUR, Sterling   https://tmsnrt.rs/31Ktp6u
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(Reporting by Karthika Suresh Namboothiri in BengaluruEditing by Marguerita Choy) ((karthikasuresh.namboothiri@thomsonreuters.com;+1-651-848-5832, +91-80-6749-0997; Reuters Messaging:karthikasuresh.namboothiri.thomsonreuters.com@reuters.net))






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