UNITED STATES (OBSERVATORY NEWS) — The price of gold rose more than 1% on Monday, recovering from a maximum of almost seven years of one-day decline due to increased expectations of the Fed to cut interest rates later in March to support the economy amid the continued spread of coronavirus.
The spot price of gold rose 1.15% to $ 1.603.0 per troy ounce by 15.09 UTC.
The Fed may have to more aggressively reduce the cost of borrowing in order to protect the economy from the effects of the rapid spread of coronavirus, which led to a fall in global stocks last week.
Amid wide sales on world markets on Friday, the gold price dipped by more than 4.5%, which was the maximum one-day decline since June 2013.
Futures now point to expectations of a rate cut of 50 basis points at the Fed meeting March 17-18.
Lower interest rates reduce the imputed cost of ownership of non-profit gold.
Lower yields on US government bonds continue to support precious metal prices, although market nervousness persists after a sharp drop last week, analysts at MKS PAMP said.
The cost of palladium decreased by 0.15% to $ 2,589.36 per ounce. Palladium fell 13% on Friday, the biggest one-day drop since the 2008 financial crisis.
Platinum almost did not change in price and was at the level of $ 863.24, while silver went up by 1.2% to $ 16.86 after that. Earlier, both metals fell to a minimum in about six months at the previous session.
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