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Gold Surges After Fed Cuts Rates

Written By Luke Burgess

Posted April 30, 2008


Gold futures gained in electronic trading today, rebounding from their decline in the regular session, as the Federal Reserve’s decision to cut the fed funds rate by 25 basis points boosted demand for the precious metal.

Gold for June delivery rose $14.90 to $880 an ounce in electronic trading on the New York Mercantile Exchange. Shortly before the Fed announcement, gold futures finished regular trading at $865.10, down $11.70.

The Federal Reserve cut short-term interest rates for the fourth time this year, signaling that it remains troubled by the economic outlook. The Fed lowered its benchmark federal funds rate by a quarter percentage point, to 2%, in line with market expectations.

On the currency markets, the dollar fell against major counterparts after the Fed decision. The dollar index, which tracks the performance of the greenback, dropped 0.5% to 72.54.

– luke