Interest rate cut. FED chops 0.5%

The FED released their rate decision and it has left investors on edge.

And amongst a raft of better than normal results for housing starts, industrial production and manufacturing, the 50 basis point cut was a little surprising. However for many, just the start of monetary easing is enough to take the edge of the extremely high cost of living pressure. With Christmas now around the corner, one or two cuts prior to the holiday season should ensure Christmas retail enjoys a reasonable result.

And the RBA could well follow suit. As unemployment is now starting to edge upwards (currently 4.2% from 3.5%), Aussies should be concerned that our monetary tightening has extended too far into our economy - adding too much pressure to businesses. Small businesses in Australia employ over 5 million people and contribute more than $500 Billion to our GDP. And comparing small to mid and large businesses; losing a staff member to a lack of revenue could well mean losing 20-30% of your workforce. This would be a devastating result for all Australians if this was to occur at scale.

Gold also continues to reach new all time highs amongst the FEDs news, continued conflict and uncertainty around the US election. As we look to the future, ‘uncertainty’ definitely fills the plate, which is a key ingredient to Gold continuing to perform.

Enjoy today’s charts and forecast. 

Gold daily chart, with 200MDA

Silver daily chart, with 200MDA

US500, with 200MDA

ASX200, with 200MDA

Gold Futures Technical Analysis

Gold Futures monthly analysis continues to recommend a STRONG BUY with Weekly analysis a STRONG BUY signal.

Technical indicators - Monthly Projections

 Summary for Monthly forecast: Strong Buy

*Not financial advice, please DYOR prior to any investment decisions you make.