Gold and Silver push higher amid dovish Fed pivot

Mainland European markets are leading the way higher in early trade, with the FTSE 100 providing the one outlier. However, much of the weakness seen in the FTSE 100 can be attributed to the declines seen in pharma giant AstraZeneca, with the second largest component of the FTSE trading 2.5% lower. Elsewhere in mainland Europe, there is a general feeling of hope that we are on a positive trajectory after the declines seen over the past two-weeks. Yesterday’s rate cut from the ECB came alongside fresh growth downgrades across the board, highlighting the banks need to intervene in a bid to kick start output in the region. With the Bank of England expected to keep rates steady next week despite a likely FOMC cut, it comes as no surprise to see the FTSE underperform.

Gold prices have hit a fresh high in early trade today, with precious metals gaining traction once again. The strength seen for gold has finally started to feed through into the more volatile price of silver, which has gained an impressive 8% over the course of this week alone. With central banks finally pivoting towards a period of monetary easing, the gains seen throughout precious metals looks likely to continue as we move forward.

Looking ahead, US markets look to kick off the final day of the week with tentative gains, as traders weigh up whether the recent rebound may lose traction. Fears over the health of the US economy do remain in place, with Michigan consumer sentiment and inflation expectations providing the two main events of note today. Nonetheless, coming into a week that will be dominated by central bank decisions from the FOMC, BoJ, and BoE, there is going to be significant concerns in place that a 25bp Fed rate cut could yet look to be a mistake should the soft landing turn out to be harder than expected.