TEXT OF STORY
Scott Jagow: Today, the Federal Reserve begins an important two-day meeting. It’s probably gonna cut interest rates again. The consensus seems to be that the Fed will lower its main rate from one percent to half a percent. There isn’t much left to cut. And it could be very bad news for the value of the dollar. More on that from Ashley Milne-Tyte.
Ashley Milne-Tyte: The usual result of a cut would be to see the dollar weaken further against the euro. And that tends to drive investors toward the safe haven of gold.
Dennis Gartman publishes The Gartman Letter, a daily commentary on the markets:
Dennis Gartman: Traditionally, given the circumstances that prevail, the weakness in stock prices, a propensity on the part of the Federal Reserve bank to err upon the side of easing — all those things would tend to push gold prices upward.
As for other precious metals, Gartman says a falling dollar won’t do much to push up their prices.
Gartman: Platinum and palladium move because they are used as . . . in catalytic converters. And the number of automobiles sold are lower and are likely to continue to be lower.
He says silver has industrial as well as decorative uses. But the industrial ones have shrunk during the down economy. So if investors want to bet on a precious metal he says, it’s gold that’s still likeliest to glitter.
I’m Ashley Milne-Tyte for Marketplace.
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