Fed Signals September Rate Cut Is Coming. What Does That Mean For Commodities?

Powell’s Rate Cut Message Sparks Market Frenzy

The most highly anticipated central bankers’ gathering of 2024 and quite possibly the most “pivotal moment” in monetary-policy history took place last Friday with Federal Reserve Chair Jerome Powell delivering his clearest message yet, that rate cuts are coming next month.

Dubbed the Davos for central bankers, the Fed’s Annual Jackson Hole Economic Symposium – once again live up to expectations – whipping up an explosive money-making storm – presenting savvy traders with a magnitude of highly lucrative opportunities to generate huge profits FAST!

Commodity prices skyrocketed across the board with everything from the metals to energies posting explosive gains – after Federal Reserve Chair Jerome Powell made it crystal clear that the “time has come” for the Fed to lower interest rates from a two-decade high.

Oil prices took centre-stage with Brent Crude rallying above $81 a barrel on Monday, extending its gains for a third session. While WTI topped $77 a barrel – surging over 8% from its recent lows of $70.88 a barrel, seen earlier this month.

The bullish momentum also split over into the precious metals with Gold prices soaring within striking distance of the all-time record high reached only 72-hours earlier.

Gold’s Historic Supercycle: Prices Soar to New Heights, $3,000 in Sight

Gold has been on a parabolic run since last October – rallying from near the $1,800 level to score back-to-back all-time highs – not once, not twice, but on multiple occasions this year.

Exactly a week ago, Gold prices rocketed to a new all-time record high of $2,531 an ounce, surpassing the precious metals previous all-time high of $2,509 an ounce set only a few days prior.

The yellow metal is now up over 26% from its February low of $1,984 an ounce. But even more remarkably, Gold prices have now chalked up a whopping gain of almost 41% since October.

Gold’s record-breaking run has been nothing short of impressive. Never before in history have we seen the precious metal score multiple all-time record highs in such a short space of time.

And this could just the beginning!

According to GSC Commodity Intelligence – “Gold is not just making new highs in 2024, but it’s really breaking out. That’s a tell-tale sign, which ultimately suggests that we could be at the beginning of a new historic Supercycle for Gold”.

All of this means one thing and one thing only. Gold prices are heading in one direction from here.

And that’s higher, a lot higher!

The big question now is: How high will Gold prices go this year?

The answer to this question may come from the size of the Fed’s first rate cut in September and the future path of easing thereafter.

Whichever way you look at it, one thing is clear. The stars appear to be aligning for Gold and it won’t take much for prices to hit $3,000 an ounce, if not exceed that mark – a lot sooner than anyone expects!