(Kitco News) – Gold is set to benefit from several tailwinds in Q4, including this week’s expected Fed rate cut, continued central bank purchases, and a rebound in Chinese demand, while silver prices will gain on standout Indian demand and a weaker USD, according to precious metals analysts at Heraeus.
In their latest precious metals report, Heraeus noted that the kickoff of the Fed’s rate-cutting cycle on Wednesday should be good for gold, even if it’s only a 25 bps cut.
“The probability that the Fed will cut interest rates by 50bp this week, as assessed by the swaps market, fell to 13%; down from 40% last week, before seeing a resurgence in dovish bets on Friday which took the probability to 43%,” the analysts wrote. “This comes as the ECB cut by 25bp for a second time last Thursday adding to transatlantic interest rate differentials.”
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