After an initial quick fall to $1,480, the gold price returned to the $1,500 mark. In other words, the Fed’s 0.25% rate cut was already priced in, as we anticipated, and investors remain quite optimistic on bullion.
Gold now starts a new phase. So far this year monetary dovish policy decisions have been one of the bullish factors. Now the room for further cuts by Fed is reduced, while the likelihood of action by the ECB is minimal. It is anyway likely that the trend remains moderately bullish, as investors are looking at gold as a safe asset in a scenario with growing risks of economic slowdown and central banks’ huge appetite for bullion.
