Copper, Gold To See ‘Immediate Price Boost’ From Potential Rate Cuts

Analysts at Goldman Sachs are projecting potential interest rate cuts by the US Federal Reserve could immediately propel metals, particularly copper and gold.

“The immediate price boost from a Fed driven 100 basis point decline in U.S. 2-year rates is the largest for metals, especially copper (6%), and then gold (3%), followed by oil (3%),” Goldman Sachs said in their February 20 note.

The analysts are also forecasting that rate cuts won’t have a substantial impact on natural gas or agricultural commodities. While they can boost demand by making borrowing cheaper, they can also potentially lower costs for producers, affecting supply and demand dynamics in complex ways.

“In practice, we find that the demand boost to prices from a lower cost of carrying inventory and from higher GDP via easier financial conditions dominates.”

Economists polled in a recent Reuters survey expect the Fed to cut the federal funds rate in June. 


Information for this story was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Silver’s Finally Breaking the System | Keith Neumeyer – First Majestic

The Best News for Gold Was the Drop! – Peter Grandich

McEwen Copper: The Los Azules Feasibility Study

Recommended

Steadright To Conduct Multi-Phased Exploration At Historic Goundafa Polymetallic Mine

Goliath Resources Drills 10.72 g/t Gold Over 7.83 Metres At Surebet

Related News

Great Bear Intersects 10.1 G/T Gold Over 34.85 Metres In Latest Results At LP Fault

Great Bear Resources (TSXV: GBR) this morning released additional drill results from the ongoing drill...

Wednesday, January 20, 2021, 08:41:05 AM

AUX Resources Begins 2020 Field Program At Golden Triangle Project, Georgia River

Mobilization for AUX Resources Corporation (TSXV: AUX) has begun. The company announced this morning that...

Tuesday, July 14, 2020, 09:41:07 AM

Big Banks are Calling for $3000 Gold | First Nordic Metals with Taj Singh

In this interview at the Red Cloud Fall Mining Showcase 2024, Taj Singh, President and...

Sunday, October 20, 2024, 03:33:00 PM

Exploits Discovery Samples 61.3 G/T Gold, 189.2 G/T Silver At Dog Bay

Exploits Discovery (CSE: NFLD) this morning reported results from its 2020 prospecting campaign on the...

Tuesday, February 9, 2021, 07:50:56 AM

Karora Resources Discovers New Gold Zones At Beta Hunt Mine

Karora Resources (TSX: KRR) released a rather lengthy update this morning related to drill results...

Tuesday, September 8, 2020, 09:05:57 AM