US Fed’s Jumbo Rate Cut Drives Stellar Rally in Gold Prices

SEATTLE (Scrap Monster): Gold had another fantastic month, stated the Gold Market Commentary-September 2024 report published by the World Gold Council (WGC). The U.S. Federal Reserve's massive rate cut of 50 basis points and growing geopolitical uncertainties were the main forces behind the month-long increase in gold prices.

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After recording strong gains in July and August, gold posted healthy gain in September, rising by 4.6% to finish the month at $2,630 per ounce. The yellow metal touched new highs eight times during the month. The global gold-backed ETFs recorded fifth straight month of inflows, primarily driven by North American funds.

WGC reports that throughout September of this year, gold continued to show notable gains against all major currencies.

The U.S. Fed is anticipated to start implementing widespread and significant rate cuts after the rate decrease that was announced last month, which could help riskier assets. Historically, gold has returned an average of 6% in the half-yearly period after the commencement of the rate lowering cycles. This suggests that gold will probably gain in the near future.

The WGC report states that gold is well positioned to benefit from evolving market conditions, including central bank buying, rising demand from key markets like India, the return of Western ETF investors, and the recent escalation in Middle-East tensions.