Khaberni - Gold prices rose by 2% today, Thursday, following the Federal Reserve's decision to cut interest rates amidst the ongoing haze surrounding investors regarding the outcomes of the trade agreement between the Presidents of the United States and China, the largest economies in the world.
According to Reuters, the spot price of gold rose by 1.9% to $4004.75 per ounce, while U.S. futures for December delivery fell by 0.4% to $4018.30 per ounce.
Lukman Otunuga, an analyst at FXTM, said that gold is witnessing a rise driven by investors waiting for the results of the meeting between US President Donald Trump and Chinese President Xi Jinping, in addition to the Federal Reserve's decision to cut interest rates for the second time this year.
The Federal Reserve cut U.S. interest rates by a quarter percentage point yesterday, Wednesday, bringing the standard overnight rate to a range between 3.75% and 4%.
Jerome Powell, chairman of the board, explained that monetary policymakers are struggling to reach a consensus on the future path of interest rates, indicating that financial markets should not assume another cut in December.
Gold, which does not directly generate a return, typically thrives in an environment characterized by low interest rates and increasing economic uncertainty, as it is viewed as a safe haven during times of volatility.
In related news, US President Donald Trump announced that he had reached an agreement with China that includes reducing mutual tariffs, in exchange for Beijing resuming its purchases of American soybeans and maintaining the flow of rare metal exports, in addition to imposing stricter restrictions on the trade of illicit fentanyl.
China also agreed to delay the implementation of the latest round of rare metal export controls, while previous restrictions on base metals that have disrupted global trade still remain.
As for other precious metals, silver rose in spot transactions by 1.4% to $48.22 per ounce, platinum climbed by 2% to $1616.20, and palladium jumped by 2.9% to record $1441.24 per ounce.
