Gold To Strengthen

  1. 9,081 Posts.
    This exerpt from today's Bullion Desk Newswire is interesting reading on the likely impact of the Fed Resreves' desision to leave US rates unchanged:

    "Comment: As expected the Federal Reserve will leave interest rates unchanged at 1.75%, however, it did indicate that it may cut rates later on to avert further slippage into a deeper recession. The equities markets responded to the Fed decision by trending lower on disappointment. Though this decision was expected, many investors had hoped that there would be interest rate cuts giving a boost to business. A result of this decision is that the overvalued U.S. dollar will likely weaken and that will be a plus for gold. The weaker bias will also give gold some support as the Fed has now indicated that there is a growing fear of further weakening in the U.S. economy. This accomplishes much of what I had said earlier, that if the Federal Reserve were to cut rates, that would signal to the markets that there is a fear among the Federal Reserve governors that the economy was in danger of further weakness. As I also had said, no matter what the decision, this was a “win-win” for gold going forward. Now the focus of investors will be on U.S. dollar weakness, the equities markets, geopolitical tensions, and the continuing saga of corporate malfeasance and accounting scandals.


    - Jon H. Warner - "

    Cheers, X

 
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