Gold Rises on Fed Rate Cut

November 1st, 2007

Here’s my take on this from several days ago. If any of you were waiting to hedge with some put options at higher strikes… Here they are.

Thank you. I’ll be here all week. Tip your waitress.

To those of you who trade options on futures (not options on equities), which firms are good these days?

Via: AP:

Gold barreled above $800 an ounce Wednesday for the first time since 1980 as investors cheered the Federal Reserve’s decision to lower its benchmark interest rate by a quarter point.

The Fed dropped its federal funds rate to 4.50 percent, as the markets widely anticipated. Lower interest rates tend to undermine the dollar and raise the allure of precious metals as an investment alternative. The dollar stumbled to another low against the euro following the Fed’s decision on Wednesday, helping drive gold higher.

Although the regular trading sessions of most commodities markets were closed before the Fed released its decision, gold prices continued to climb in aftermarket trading. An ounce of gold gained $7.50 to settle at $795.30 an ounce on the New York Mercantile Exchange, then rose to a high of $800.80 ounce in later electronic activity.

Gold last topped $800 an ounce in 1980, when prices reached as high as $875 an ounce in January. Adjusted for inflation, an $800 ounce of gold in 1980 would be worth more than $2,000 today.

Posted in Economy | Top Of Page

One Response to “Gold Rises on Fed Rate Cut”

  1. RobertS says:
    November 2, 2007 at 5:55 pm

    November 2,2007 1:45 PM EDT.

    For those that follow Midas and GATA, the last hour of spot gold was most remarkable. For the first time since I’ve been watching gold (about 6 years), the spot closed up sharply through a hundred dollar bound. In other words, someone has stepped up to the plate and suckered the punks! A favorite cartel strategy (spiking the price in the closing hours of Fridays) has been used against them. You can bet there is horrified squealing occurring in DC, London, NY and Geneva as we speak.

    I’m keeping my fingers and toes crossed, this isn’t just a bull trap; but I think we may finally be seeing the end of the price suppression scheme.

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