Gold miners’ share rally after ECB’s rate cut, growing expectation of Fed’s rate cut
Gold miners’ share rally after ECB’s rate cut, growing expectation of Fed’s rate cut

Gold miners’ share rally after ECB’s rate cut, growing expectation of Fed’s rate cut

 

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Gold miners stage a rally after gold futures rallied driven by the European Central Bank’s historic rate cut, a weakening US dollar, and growing anticipation surrounding Friday’s US jobs report.

Lingbao Gold is surging nearly 5% in Hong Kong as of 2:10 pm local time, SD Gold up more than 3%, Zhaojin Mining up more than 2%.

Gold prices rose in Asian trade on Friday, coming close to key highs as bets on interest rate cuts by the Federal Reserve grew in hope of key non-farm payrolls data due later in the day. Market participants are eagerly awaiting Friday’s US jobs report after a string of weak US economic data pushed up expectations that the Fed will begin cutting rates in September. 

The ECB delivered its first-rate reduction in five years, slashing its deposit rate by 25 basis points to 3.75%, marking a pivotal shift in the central bank’s monetary policy stance, as it became the first major central bank to ease rates since the global fight against inflation began. The decision was prompted by the eurozone’s inflation rate falling from around 10% in 2022 to just above the ECB’s 2% target, thanks to declining energy costs and improved supply chain conditions.

The ECB’s action, combined with a softer US dollar, provided a significant boost to gold prices. Spot gold rose 0.5% to $2,386.55 an ounce, while gold futures expiring in August rose 0.6% to $2,405.40 an ounce.