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Gold price stabilized after rally caused by Fed rate cut

US, WASHINGTON (NEWS OBSERVATORY) — The price of gold is slightly changing on Wednesday after the maximum growth since June 2016 on the eve, caused by a sudden decrease in the rate of the Federal Reserve System.

The spot price of gold increased by 0.2% to $ 1.642 per troy ounce to 16:19 Moscow time.

Gold rose 3.7% on Tuesday after the Federal Reserve lowered its key rate by 50 basis points, seeking to mitigate the economic damage from the outbreak of coronavirus. The US Central Bank did not lower the rate at the scheduled meeting for the first time since 2008.

“The market is probably waiting for new possible applications from other central banks … the stock market has recovered a bit, and this (leads) to some profit-taking in the gold market,” said Saxo Bank analyst Ole Hansen.

The dollar index recovered slightly after falling to a minimum of two months on Tuesday, which limits the rise in gold prices.

Palladium decreased by 1.9% to $ 2.454.6 an ounce, platinum – by 0.2% to $ 872.9 an ounce. Silver rises in price by less than 0.1% to $ 17.19 an ounce.

Demand for platinum in the automotive industry will grow for the first time since 2016, but this is not enough to compensate for the reduction in purchases of precious metals for investment purposes and to avoid surplus in the market, the World Platinum Investment Council (WPIC) said.

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Article is written and prepared by our foreign editors from different countries around the world – material edited and published by News Observatory staff in our US newsroom.