Finotec News Archive - August 27 2007
Gold, may rise if Fed cuts interest rate
Gold, may rise if Fed cuts interest rate
Rodian Rahnayev 
27 August 2007
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Gold was little changed in Asia as investors awaited clues on the direction of the dollar amid speculation that the U.S. Federal Reserve will cut interest rates. Bullion, often viewed as an alternative asset when the dollar is falling, generally moves in the opposite direction to the U.S. currency. Global stock markets have rebounded on speculation the Fed will try to stem losses in credit markets and sustain growth by cutting rates, which may weaken the dollar. ``Investors are waiting to see how the U.S. market will react after it reports more economic statistics,'' said Peter Tse, chief precious metals trader at ScotiaMocatta, the bullion arm of the Bank of Nova Scotia. ``Bullion will be quiet today because of a holiday in the U.K.,'' he said by phone from Hong Kong. ``Gold is pinning its hopes'' on an interest rate cut by the Federal Reserve, which ``could predictably send the dollar Lower,'' Jon Nadler, an investment-products analyst at Montreal- based Kitco Minerals & Metals Co., said in an e-mail Aug. 25. Gold rose the most since June on Aug. 24 after a decline in the value of the dollar increased the appeal of the precious metal as an alternative investment. It may rise this week, according to a survey by Bloomberg News on Aug. 23 and Aug. 24.
Finotec Analysis Team
27 August 2007
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