Sep 20, 2024 (MENAFN via COMTEX) --
(MENAFN - Daily Forex)
Gold markets have rallied pretty significantly during the early hours on Thursday as we are trying to recover a lot of the lost ground late during the day on Wednesday. Remember the Federal Reserve cut interest rates by 50 basis points and that is a bit of a mixed bag. While it should be good for certain assets, the question becomes why did they cut 50 basis points instead of just 25?
I think this is a conversation we are going to be hearing more and more of in the next few weeks as we try to discern whether or not the Fed just showed signs of panic. While gold, of course, would be a safe haven asset, you do have to keep in mind that sometimes under specific conditions, traders will be forced to raise liquidity, and that generally means selling the positions that are doing so well in order to cover for losses in other markets Liquidity? Not at the Moment.
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As things stand right now, I don't think that's really the case, but it is interesting that we gave back quite a bit of the gains late during the Wednesday session. The question now is whether or not
gold can break $2,600. I think it does eventually, but we have had the Federal Reserve cut rates by 50 basis points, and the Bank of England come and go. And now we have the Bank of Japan first thing on Friday morning. So, it all means volatility. With all of this being said, I think you've got a situation where you continue to buy the dips in this market. And I still believe that the $2,530 level is an area of potential support due to market memory. Let's assume that we even drop to get down to that area.
The relative strength index is somewhat elevated, but it is not in an overbought condition. So, all things being equal, it does look a bit steady as she goes, but it wasn't quite the home run everybody I think expected at the initial part of the announcement.
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COMTEX_457977706/2604/2024-09-20T18:12:04
