Gold News

Gold could be boosted by economic 'flashing lights'

The head of a leading precious metals consultancy has claimed today (October 30th) that the US interest rate cut will lead to a number of economic factors which are positive for gold.

The Fed announced last night that it was slashing the base rate from 1.5 per cent to one per cent in order to "promote a return to moderate economic growth".

However, Jeffrey Nichols, managing director of American Precious Metals Advisors, has explained in an interview with Bloomberg that the move will play into the hands of anyone with a gold investment.

He told the news provider: "The flashing lights that investors are seeing ahead are the lights of inflation and currency depreciation."

The Federal Open Market Committee released a statement last night outlining the major reasons for its decision, which follows a cut from two per cent to 1.5 per cent earlier in the month.

One section reads: "The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures.

"Intensification of financial market turmoil is likely to exert additional restraint on spending, partly by further reducing the ability of households and businesses to obtain credit."

The base rate of interest in the US has varied between one per cent and 19 per cent since 1954.

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