Daily Gold Update

Source: MarketWatch

New York— Gold futures surged to a new record high of $942.20 an ounce on Wednesday, after the Federal Reserve cut the fed funds rate by 50 basis points to 3.0%, meeting market expectations. Gold for April delivery soared as high as $942.20 an ounce in electronic trading on the New York Mercantile Exchange, hitting a new record high. The contract was last up $4.20 at $935 an ounce. Before the Fed decision, gold ended down $4.50 at $926.30 an ounce in regular trading. The Federal Reserve's 50 basis points rate cut "sets the stage for a further rally in gold, but the upside target remains near $940 and probably not much beyond $950 at the moment," said Jon Nadler, senior analyst at Kitco Bullion Dealers.

The dollar weakened against most of its major counterparts after the Fed rate cut. The dollar index, which tracks the performance of the greenback against six other major currencies, declined 0.6% at 75.125. "Before this easing cycle is over, we expect the Federal Reserve to bring US interest rates down to at least 2.50%," said Kathy Lien, chief strategist at Forex Capital Markets LLC. "If the economy does not improve, interest rates could realistically return to 1%," Lien said. "As a result, the US dollar will not escape further weakness." See full story.