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The gold train has left the station, while the silver one is just about to...

The International Monetary Fund (IMF) on July 23 lowered its global growth forecast for this year and the next, warning that more US-China tariffs, auto tariffs or a disorderly Brexit could further dampen growth, weaken investment and disrupt supply chains.

Gold prices have lately seen an upsurge following expectations of monetary policy easing from major central banks to shore up the global economy. Escalating tensions in the Middle East have also added to the safe-haven appeal of gold. A stronger US dollar, however, capped the gains.

The European Central Bank (ECB) signalled an accommodative monetary policy at its meeting on July 25. The US Fed is also widely expected to cut its overnight benchmark lending rate. Lower interest rates reduce the opportunity cost of holding non-yielding bullion. If the Fed surprises with a 50 bps cut, gold prices could get a further boost.

Concerns about tepid economic growth have prompted central banks around the world to review their monetary policy stance. The International Monetary Fund (IMF) on July 23 lowered its global growth forecast for this year and the next, warning that more US-China tariffs, auto tariffs or a disorderly Brexit could further dampen growth, weaken investment and disrupt supply chains.

Gold has taken off. But silver still has a long way to go.

Courtesy - Money Control

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