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Jumbo Fed cut drives gold rally
Following strong monthly increases in July and August, gold posted another healthy gain in September to finish 4.6% higher at US$2,630/oz. It etched new highs eight times, with the latest one falling on 26 September before a very marginal decline into month end (Table 1). According to our Gold Return Attribution Model (GRAM), gold was pulled higher by a further drop in the US dollar as the Fed embarked on its rate-cutting programme with a somewhat surprising 50bps cut (Chart 1). And similar to last month, the main identifiable negative contribution came from a momentum factor: the gold return in the previous month, ... (full story)