Gold Price News: Fed interest rate decision dominates the gold market

At the start of trading on September 19, 2024, the gold price is trading at around 2,563.80 USD per troy ounce. After the highs of the last few days, the gold price is thus showing a slight decline compared to the last few days. This price decline reflects a consolidation phase, which is common for the volatility of the gold price after significant monetary policy decisions such as the Fed's interest rate cut.

The US Federal Reserve (Fed) decided at its meeting yesterday to cut its interest rates by 50 basis points, leading to a decline in real yields and a weakening of the US dollar. These conditions are traditionally favorable for gold, as lower interest rates counteract the opportunity cost of holding non-interest-bearing assets such as gold.

Despite the recent price volatility, demand for gold remains robust, driven by ongoing global uncertainty and geopolitical tensions. In addition, rising production costs and more difficult mining conditions for gold are limiting supply, which also supports the gold price. The correlation between strong demand and limited supply of gold is expected to continue to support the gold price.

Analysts predict a long-term optimistic outlook for gold, driven by expectations of further monetary stimulus. The Fed has signaled an additional interest rate cut of another 0.5 percentage points later this year. It has also announced further interest rate cuts to a level of 3.4% by 2025, which further strengthens the outlook for gold. Today's rate cut could be the start of sustained monetary easing, with the key rate expected to remain at a level above two percent. Against this backdrop, forecasts suggest that the price of gold should continue to rise in the coming years, which would be particularly evident if global economic and political uncertainties continue.
 

Investors should currently be prepared for further market fluctuations, as reactions to the Fed's monetary policy measures will continue to influence the markets. Depending on the developments of economic indicators and the reactions of central banks to global economic changes, investors may reassess and adjust their investment strategies. Gold will remain an important component in the portfolios of investors seeking stability in uncertain times.