Dow Future Drop Nearly 70 Points, Gold Hovers Near All-Time Highs As The Federal Reserve Hints At More Cuts
U.S. stock futures are down following the Federal Reserve's recent rate cuts, with Dow Futures dropping nearly 70 points. The Nasdaq and S&P 500 also show slight declines. Meanwhile, gold prices hover near record highs at $3,696 per ounce, with predictions of further increases due to inflationary fears. Analysts suggest a shift in investment strategies, with Morgan Stanley reallocating part of its bond portfolio to gold. James Turk forecasts gold could reach $4,000 per ounce soon, while silver may also see significant gains.
U.S. stock futures inch lower on Sunday night after touching record highs on Friday, following the Federal Reserve’s rate cuts last week, amid hints of more easing in the coming months.
All three major indices are currently in the red, with Nasdaq Futures down 0.06%, or 15.75 points, trading at 24,851.00, while the S&P 500 Futures are down 0.10% and 6.50 points, at 6,716.00, followed by the Dow Jones Futures at 46,582.00, down 0.15% or 69 points.
Japan's benchmark Nikkei 225 is up 1.27% or 575.19 points, trading at 45,616.50 at the time of writing, with semiconductors, electronics, and export-oriented stocks leading the charge.
Meanwhile, the U.S. Dollar Index (DXY) rose 0.15% on Monday, trading at 97.790, despite the rate cuts and hints of an extended dovish stance by the Fed.
Gold Hovers Around Record Levels
Gold prices continue to hover around record levels, trading at $3,696 per ounce at the time of writing this, with leading analysts and experts predicting more gains as the Fed’s dovish stance gives rise to inflationary fears.
Economist Peter Schiff said last week that investment bank Morgan Stanley MS has revised its “classic 60/40 portfolio,” which essentially involves 60% allocated to equities and 40% to bonds, with part of the bond share now allocated towards gold.
Schiff said that if investors start following this advice, “both long-term interest rates and gold prices are headed much higher.”
According to Schiff this is tantamount to Morgan Stanley issuing a “Sell” rating to U.S. Treasuries, which he says, could not have come at a worse time, since “the U.S. Treasury needs to issue more Treasuries than ever before.”
James Turk, the founder of Goldmoney, a precious metal investment company pegged a near-term price target of $4,000 per ounce for the yellow metal, and $50 per ounce for silver in a post on X last week.
Turk also highlights the gold-to-silver ratio, which currently stands at 85.5, meaning an ounce of gold is now worth 85.5 times more than an ounce of silver. He said that the ratio will keep falling, signaling that silver will outperform gold in the near term.
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