US Federal Reserve Interest Rate Cut Impact on Gold??

Florida Stacker

Florida Stacker

New Member
The Fed meets today at 2 PM EST and a .25 basis point rate cut is expected. Usually, a weakening dollar is bullish for Gold and there is talk of recession around the corner here in the US. Are any of you expecting us to test new highs by the end of the week? I am and therefore i placed my weekly physical silver and digital gold orders ahead of the call.

Is $1,560 - $1,575 by close Friday in the cards?

What are your thoughts?

FS
 
Price cut probably already factored in, markets seem disappointed by the 1/4% so probably not. Trump is furious, a rising stock market strokes his ego. So maybe some sideways action for a while (aka consolidation) with another rate cut imminent, and necessary for liquidity later in the year, then gold price may rise.

I haven't listened to Powell's speech but if you get a chance have a listen, if he's uncertain and bumbles around then that could be a signal of some dovish behaviour.
 
I don't know what Trump is on about. Instead of worrying about much needed infrastructure projects which will put money in the general economy, he keeps trying to pump up the stock market that only benefits a small percentage of people.

Looks like private sector credit will continue to contract and the FED will do more large scale QE by end of year. Though it will have no real benefit for the general economy as that credit won't go to increase productivity, just more paper speculation.

Here you can see base money collapsing (left), which clearly reflects the FED balance sheet shrinking (right). The private sector is not willing to absorb more debt, so it's up to the government to spend or more central bank QE. (or recession)

Gold might go down before it goes up.

money.jpg

https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
https://tradingeconomics.com/united-states/money-supply-m0
 
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Wow, thank you for the in-depth analysis of this. I appreciate such a thorough response. I personally wouldn't mind Gold coming down as a fairly new stacker and avid admirer of the yellow metal. Looks like one more cut is likely based on guidance by the end of this year. It could get interesting headed into the 2020 election year with PM prices.

https://www.facebook.com/florida.stacker.5
 
They arent close to done lowering them. Zero will come eventually and they will have no choice.

Usually in the best and strongest economy in history they would be raising rates but not this time.
Maybe someone likes to fib alot.
 
ddevil said:
Not only will they go to zero, they will go negative
Click to expand...

I’m not so sure anymore. I think that some public bureaucrats have clicked that lowering rates has had the opposite effect on the private sector, savers are fearful that their retirement funds are in jeopardy because of low rates so they turn off the spending tap as much as possible.

So these bureaucrats will turn their to deficit spending instead.
 
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