Fed's surprise rate cut: what happens next to gold prices?
(Kitco News) - The Federal Reserve surprised the markets with an emergency 50 basis-point cut on Tuesday. Gold surged but the Dow Jones Industrial Average still sold off.
CPM Group’s managing partner Jeffrey Christian talks gold’s reaction to the move and what it could mean for prices going forward. “The Fed lived up to the expectations of the market because partly it had to,” Christian told Kitco News on the sidelines of the PDAC.
Gold prices rose on the news, but this movement is not out of the ordinary, Christian said.
“We’ve seen gold and silver prices rise sharply but they are within the band of what we’ve seen over the last week. We think that it is probably a one-time spike, he said.”
Christian added that any fiscal response may come too late, as stimulus would take up to six to eight months to take effect, by which time the coronavirus would likely already be contained.