Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Gold Edges Lower after Previous Day’s Rate Cut Rally

Published 2020-03-04, 09:24 a/m
© Reuters.
XAU/USD
-
XAG/USD
-
GC
-
HG
-
SI
-
PL
-

By Noreen Burke

Investing.com -- Gold prices edged lower on Wednesday a day after posting their largest one-day percentage gain since June 2016 in the wake of the Federal Reserve’s dramatic rate cut, a measure aimed at calming fears over the economic impact of the coronavirus outbreak.

By 09:07 AM ET (1407 GMT), gold futures for delivery on the Comex exchange were trading at $1,642.00 a troy ounce, little changed for the day. Spot gold was at $1,641.40.

Gold rallied as much as 3.7% on Tuesday after the Fed cut rates by 50 basis points in an emergency move, citing the “evolving risks” of the coronavirus to the U.S. economy.

The last time the Fed made a rate cut between scheduled meetings was in October 2008 at the height of the global financial crisis.

The U.S. central bank acknowledging scale of the challenge and the limits of monetary policy to deal with a public health crisis but said the cut could provide a “meaningful boost” to the economy.

"The market is probably waiting for additional potential announcements from other central banks ... the stock market has recovered a little bit, and that's (leading to) some profit taking in gold," said Saxo Bank analyst Ole Hansen.

"Cutting rates was probably a wrong decision because it also leaves the Fed with even less ammunition for future cuts ... the market is based on the assumption that it's a small plaster on the big wound and it's not going to help in the short term."

The Bank of Canada is expected to follow the Fed's example at its policy meeting later Wednesday.

Silver futures were little changed at $17.15 an ounce while platinum futures rose 0.9% to $877.35. Copper futures were up 0.5% to $2.58 a pound.

--Reuters contributed to this report

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.