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Weekly Market Reports

Fed Preps for First Rate Cut Since Financial Crisis

Daily Gold & Silver Market Report –7/29/2019

  • Federal Reserve to meet this week for a decision on an interest rate cut.
  • Gold prices get a lift on expectations of dovish monetary policy. 
  • Other major policy decisions expected from Europe and Asia.

The United States Federal Reserve is widely expected to cut interest rates this week. Many investors have predicted a quarter-point cut, while some suggested the cut may be up to half of a point. If the Fed does cut interest rates, it would be the first time since the 2008 financial crisis, sending a firm signal that the economy has reached its peak. For several years, the Fed has slowly increased rates to return the U.S. economy to a more promising position, a plan that turned out to be effective. The New York Times writes that a rate cut from the Fed would likely get a warm response from President Trump, who has criticized the central bank over its 2018 increases, saying “The Fed acted too soon. I turned out to be right, they acted too soon and too violently.”

Fed Chairman Jerome Powell recently made remarks confirming the possibility of an interest rate cut. He recently told federal lawmakers that “the uncertainties around global growth and trade continue to weigh on the outlook.” The Fed operates independently of the White House, and Powell reiterated that all decisions would be based on what was needed to support economic expansion.

Gold Prices Lift Higher Before Fed Meeting

Gold prices lifted gently higher on Monday morning, supported by forecasts of an interest rate cut midweek from the U.S. Federal Reserve. August Gold went up 0.1 percent to $1,419.95 a troy ounce by 8:55 a.m. (ET). “More important than what happens on Wednesday is what the market expects of the Fed in follow-through action in September and beyond,” Investing.com senior commodity analyst Barani Krishnan stated. “Here’s where the real disappointment could be for Gold longs, as the Fed might not be as dovish as many expect.” 

Gold prices tend to rise when interest rates fall, but other market factors have significant influence, as well. Investors will be paying very close attention to all forthcoming remarks from the Fed. Silver futures were also up 0.1 percent, with Platinum picking up steam, rising 0.9 percent to $875.40 per troy ounce. Palladium futures took a dip down 0.2 percent to $1527.40. 

New Policies Due from Europe and Asia

Economic analysts will have a lot to work with this week, as a wealth of policy decisions are scheduled over the next few days. Several key data points will be released from the European Central Bank, including euro-area confidence numbers, which are expected to be in decline. Inflation data is also scheduled Tuesday, with purchasing managers indexes coming to light on Thursday. According to Bloomberg, the Bank of England will also publish forecasts for the rest of the year. Turkey’s Central Bank Governor Murat Uysal will present a quarterly inflation report, followed by a public Q&A session. The Bank of Japan will wrap up a meeting on Tuesday, with monetary policy remarks expected shortly after. 

At 10:12 a.m. (ET), the APMEX Gold and Silver spot prices were:

  • Gold, $1,422.10 Up $0.00
  • Silver, $16.46 Up $0.01
  • Platinum, $877.60 Up $10.80
  • Palladium, $1,537.90 Down $1.10

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Disclaimer:
APMEX Market Reports provide our readers with a review of spot price activity and some of the factors that may be affecting the market for Precious Metals. While the information is obtained from sources we believe to be reliable, we do not guarantee its accuracy or its completeness and we encourage you to conduct your own investigation prior to making any decision based on the information. The Market Reports are not intended as a comprehensive discussion and there may be other factors affecting the financial marketplace. These Market Reports are provided for informational purposes only and do not constitute a recommendation by APMEX to hold, purchase or sell any Precious Metal product. All orders, purchases and sales, if any, are subject to the terms of the User Agreement and other applicable policies.

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