Gold rises to a two-week high

After the ECB confirmed its orientation towards an ultra-loosen monetary policy yesterday, the focus is now on the Fed meeting on October 29-30. A rate cut of 25 basis points is expected.

At the end of the week, gold continues its rise of the past trading days and has so far been trading at 1,507.05 US dollars per troy ounce in the high – a two-week high.

 

After the European Central Bank (ECB) confirmed its orientation towards an ultra-loose monetary policy yesterday and ECB Chairman Mario Draghi will hand over the reins to Christine Lagarde as of November 1, the eyes now turn to the Federal Reserve Bank (Fed) meeting on October 29-30.

It is to be expected that the Fed will lower its key interest rate by 25 basis points to 1.50 to 1.75 percent for the third time in a row. According to the CME’s FedWatch Tool, the probability of this happening is currently 93.5 percent.

US President Donald Trump continues to push for falling interest rates. Recently he twittered: “The Fed will miss its duty if it does not lower the key rate… Take a look at our competitors around the world. Germany and others are actually being paid to borrow money. The Fed was much too fast with interest rate hikes and much too slow with interest rate cuts”.