AXMIN Inc (TSXV: AXM)
AXMIN Inc. (TSXV:AXM) is a Canadian-based exploration and development company with a strong focus on central and West Africa.
On Friday (September 13 local time), optimistic sentiment in the market regarding an impending interest rate cut by the Federal Reserve fueled bullish momentum for gold. Increased capital inflows and a declining dollar also contributed to this trend, pushing gold prices to historical highs.
As of 11:58 AM Eastern Time, the spot price of gold reached a record high, rising 0.9% to $2,582.05 per ounce. U.S. gold futures climbed 1.2% to $2,610.30 per ounce.
However, even if the Federal Reserve takes unexpected actions, gold may prove to be “a comprehensive tool for hedging against risks regardless of what happens.” Gold editor Brien Lundin noted that the allocation of gold in global portfolios is increasing; whether the Fed gradually cuts rates or makes an emergency cut in the face of economic recession, gold stands a good chance of performing well.
Jim Wyckoff, senior market analyst at Kitco Metals, pointed out that the European Central Bank lowered its main interest rate this week, and the Fed is expected to cut rates next week, alongside mild inflation data in the U.S. These factors are favorable for bulls in the gold and silver markets.
The CME FedWatch Tool shows that the market fully expects a rate cut next week, with a 57% probability of a 25 basis point cut and a 43% probability of a 50 basis point cut. This would mark the Federal Reserve’s first rate cut since 2020.
Analysts at Deutsche Bank stated, “The market still expects the Fed to cut rates by about 100 basis points by the end of the year, implying that at least one of the two meetings after September must include a 50 basis point cut. Therefore, the increase in gold prices is likely due to the significant expectations for rate cuts in the coming months.”
Joe Cavatoni, senior market strategist at the World Gold Council, believes that while the market’s expectations of rate cuts have already been reflected in the rise of gold prices, this impact has not yet been fully realized. He anticipates that rate cuts may further drive up gold prices in the coming weeks and lead to an increase in investor demand.
The World Gold Council reported last week that global physically-backed gold exchange-traded funds saw inflows for the fourth consecutive month in August.
