The price of gold rose to a fresh record high of more than $2 609 on Friday as the prospect of fresh US interest rate cuts boosted demand for the precious metal.
The commodity jumped to as much as $2 609.74 per ounce, two days after the Federal Reserve slashed borrowing costs for the first time since the start of the pandemic and indicated that more cuts were likely.
But the rand slipped on Friday morning after strong gains over the past week. The local currency was trading close to R17.80/$ a week ago, but briefly broke through R17.40/$ on Thursday. On Friday morning, it was trading at R17.57.
“The rand is likely to remain within a R17.40/R17.70 range in the short term as it tracks international moves but we could see further profit-taking, given the rand’s recent strong run,” Andre Cilliers, currency strategist at TreasuryONE, told Reuters. On Friday morning, the JSE’s All Share index rose 0.4%.
Wall Street stocks soared to fresh records Thursday as markets cheered the Federal Reserve’s move to aggressively cut interest rates to protect the labour market.
The Dow Jones Industrial Average gained 1.3 percent to 42 025.19, its first close above 42 000.The S&P 500 also shot to an all-time, surging 1.7 percent to 5 713.64, while the tech-rich Nasdaq Composite Index jumped 2.5 percent to 18 013.98.
“Lower rates are going to be unanimously good for markets,” said Art Hogan of B. Riley Wealth Management.
The Fed on Wednesday cut its key lending rate by half a percentage point, opting for the larger reduction after also weighing a quarter-point move.
Stocks fluctuated in the final two hours of trading Wednesday after the Fed decision, with some analysts noting a bit of disappointment over Fed Chair Jerome Powell’s guidance not to expect large rate cuts on a regular basis.
But the market’s response Thursday was unfettered bullishness, with all three indices in positive territory the entire day.
“The upside moves reflect a belief that the economy is in good shape and the Fed will cut rates as needed to maintain a solid economic backdrop. This morning’s data supported this optimistic view,” said a note from Briefing.com that pointed to lower jobless claims.
The biggest gainers in the Dow included Apple, Caterpillar, Goldman Sachs and Salesforce. Eight of 11 sectors in the S&P 500 finished higher.
Europe’s main stock markets retreated at the start of trading following hefty gains the previous session triggered by the long-awaited cut to US interest rates.
London’s FTSE 100 index dropped 0.5 percent to 8,284.90 points.In the eurozone, the Paris CAC 40 index shed 0.3 percent to 7,593.13 points and Frankfurt’s DAX lost 0.7 percent to 18,875.12.
Paris had led the way Thursday, closing up 2.3 percent.
Additional reporting by News24
