Gold prices steadied on Wednesday in Asia after the U.S. Federal Reserve’s rate cut sent the 10-year Treasury yields to an all-time low.
Gold futures for April delivery last traded at $1,644.50, up 0.01%.
Overnight, the U.S. central bank slashed rates by 50 basis points, cutting rates outside the normal cycle of meetings for the first time since 2008.
The decision was in line with expectation and had little impact on global equities.
The yellow metal, however, traded higher following the news as lower interest rates reduce the opportunity cost of holding non-yielding gold while weighing on Treasury yields and the dollar, making gold cheaper for those buying in other currencies.
Gold prices have now jumped more than 8% so far this year amid safe-haven demand. They hit a seven-year high last week.
“Gold may edge higher further as investors seek safety in gold amid concerns over the global economic slowdown. As coronavirus is now spreading faster outside China and US Fed’s emergency rate cut roiled financial markets, the demand for safe assets like gold will increase,” said Hareesh V, head of commodity at Geojit Financial Services./Investing.com