Gold prices continue to break new records
Once again, gold prices have reached a new high as the market grows more confident that the Federal Reserve will cut interest rate this week
Lower interest rates are a positive sign for gold and other precious metals, as they reduce the opportunity cost of investing in non-yielding assets. The Fed is widely expected to signal the start of an easing cycle this week, which could see interest rates drop by over 100 bps by the end of the year.
The yellow metal also benefited from a swathe of central bank buying this year, especially in the emerging market space. This saw bullion prices perform better than other precious metals.
Asian stocks rise on interest rate cut hopes
Most Asian stocks rose slightly on Tuesday in anticipation of an interest rate cut by the Federal Reserve.
Australia’s ASX 200 index gained 0.3%, while Hong Kong’s Hang Seng rose 0.9%, bouncing back from a sharp drop in the previous session, which was driven by weak economic data from China
Futures for India’s Nifty 50 pointed to a flat opening, though the index is still on track to hit a record high. India’s inflation data is set to be released this week
The Fed is widely expected to kick off an easing cycle from Wednesday’s meeting, with lower rates presenting a more positive outlook for stock markets.
Lower rates free up more liquidity for investing into risk-driven assets, which usually sparks flows into stock markets.
