Gold: Significant appreciation expected this year – TDS

The Fed has been monitoring global markets and attempted to quell the tightening of financial conditions catalyzed by the coronavirus. The market reaction to the rate cut was rational in the opinion of analysts at TD Securities. Gold is being valued at $1641.84.

Key quotes

“The Fed fired two (blank) bullets in its attempt to loosen financial conditions, which ultimately removed dry-powder for a future response, and the market is still looking for more cuts.”

“While some believe that the emergency cut spooked markets, we think it is more plausible that the market reaction was a rational one.” 

“With interest rates now closer to the zero-bound, conventional monetary policy is creeping closer to its limits, which can open the door to nonconventional policies, particularly in the midst of an election cycle.”

“We think that gold — a store of value with 6,000 years of history — will appreciate significantly this year.”