Gold prices are on an upward swing after the Federal Reserve announced a 50 bps interest rate cut on Wednesday. The rate cuts come after a four-year hiatus, with inflation cooling down at 2.53%.
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Impact Of Fed Rate Cuts On Gold Prices And Market Reactions
The Feds are not finished yet, as inflation needs to be brought under 2% to get the economy on track. If the following CPI data shows the numbers increasing, the markets could react strongly and trade in the red.
Gold Prices Hit Record High
However, gold prices are in the limelight as they hit a record high of $2,592 after the 50 bps rate cut announcement. The precious metal is looking to breach the $2,600 mark and go further up in the indices. The prices cooled down on Thursday’s opening bell, and the XAU/USD index is trading at $2,582.
It is still attracting bullish sentiments, and a spike above $2,600 could be on the cards for gold prices. Even the US dollar snapped its week-long losing streak and turned green on Thursday’s opening bell. The DXY index, which tracks the US dollar’s performance, shows the currency at 100.74. It surged 0.14% in the charts, rising 0.14 points in the day’s trade.
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Gold Prices Could Soon Hit a Target of $2,650: Predicts Analyst
Gold prices have turned bullish lately as retail investors, institutional funds, and central banks of developing countries are accumulating it. Naveen Mathur, Director of Commodities and Currencies at Anand Rathi brokerage, predicted that gold prices could reach $2,650 next.
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He forecasted that the tentative timeline for the price target would be Q1 of 2025: “12% to 15% returns in gold in 2025 as compared to 2024 cannot be ruled out. We expect spot gold to average around $2,600 to 2,650 in 2025. Compared to the year-to-date average of $2,280 per oz in 2024,” he said to LiveMint.