The Federal Reserve sliced interest rates by a half-percentage point Wednesday, another significant cut that follows on the heels of the emergency three-quarter percentage point reduction just eight days ago on Jan. 22.
The federal fund rate, an overnight bank lending rate that affects how much interest consumers pay on credit cards, home equity lines of credit and auto loans, was cut to 3.0% from 3.5%.
Day, after day, after day, after day … and so on. Gold continues to surge past the previous day’s record highs. It hit $897.30 on the New York Mercantile Exchange (NYMEX), which was higher than the record of $894.40 on Wednesday.
Gold was helped today after Federal Reserve Chairman Ben Bernanke indicated more interest rate cuts are on the horizon. That resulted in the dollar sharply falling and gold strengthening.
Many analyst are suggesting and expecting gold to hit $900 an ounce and very soon. At some point, there could be a correction with profit taking. Will that happen after and if gold reaches $900? Only the crystal ball knows …
At 5:11 a.m. EST, spot gold was at $893.50.
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