PRESS ROOM
US Fed’s surprise rate cut lifts gold
Thursday 05th March '20
When the US Federal Reserve provided a surprise cut in interest rates on 3rd March 2020, gold rose 3.3.% after the announcement. Gold has recently been supported by low interest rates and the 10-year US Treasuries recently fell below 1% for the first time. Unfortunately, with Fed hitting the “panic button”, equity markets were spooked and the S&P 500 slipped 3.5%. Last week when gold was falling alongside equities some had doubted gold’s “safe haven” credentials. In reality what was happening was that gold was being sold as a liquid asset to meet margin calls on equity futures. It was being utilised as a liquid, cash-like asset. Gold is now rising again this week as while cyclical assets are still falling.