GTC Chief Analyst Jameel Ahmad on FRANCE24 | Fed Cuts Rates Significantly, Market Surprised as Gold

On Wednesday, the Federal Reserve unexpectedly lowered its benchmark interest rate by half a percentage point, exceeding market expectations and showcasing a proactive and aggressive move. GTC FX Chief Analyst Jameel Ahmad pointed out that this action aims to support a potentially weakening U.S. economy, with the market anticipating further rate cuts by the end of 2024.

At the same time, gold prices surged to a record high, surpassing $2,600, driven by the rate cut. Precious metals typically benefit from lower interest rates, and gold prices have already risen by more than 25% this year. The market remains optimistic about gold's future prospects.

In the upcoming trading days, the market's attention will shift to the policy decisions of the Bank of England and the Bank of Japan. While the Bank of England may not lower rates immediately, it could pave the way for a rate cut by the end of the year. The Bank of Japan could become a focal point, especially if it signals a rate hike, contrasting with other central banks rate cuts, which would place the yen in the spotlight.