Gold broke the $900 per ounce plane once again and platinum peaked to a new historic record today. Gold had tumbled for a time this week but the Federal Reserve’s unexpected slashing of interest rates Tuesday helped change the momentum.
Spot gold hit an earlier high of $910.50 an ounce and was at $907 by 1:56 p.m. EST for a rise of $22.20 over yesterday. At the same time, spot platinum was at $1606 per ounce and up $56 compared to yesterday.
The rate change has been a catalyst, spurring climbs. The potential prospect of further interest cuts make gold and platinum more attractive, but precious metals were also helped along by the recovery of U.S. stocks and rising crude-oil prices.
Should rates drop again, the US dollar would weaken, making gold and platinum cheaper for non-U.S. investors. Regardless, many expect gold to remain bullish for the mid term. According to a Reuters global poll:
"50 traders and analysts forecast average gold prices surging more than 20 percent this year and gold retaining most gains in 2009 as dollar weakness, market turmoil and inflation fears stoke investor interest."
Tuesday’s federal funds rate drop of 75 basis points, from 4.25 percent to 3.5 percent, was the largest on record since 1990. It was also the first time rates had been changed between Fed meetings since the terrorist attacks in 2001.
Yet, some analysts expect another rate reduction at next week’s Fed policy meeting. At the same time, others are lowering their odds of any large cut.
I told you so! Precious Metals price did it again! Just like saying gimmie * gimmie = gimmie2 The price of silver, gold, platinum, and palladium rises more and more. I bet you want more of it!