Gold prices rose 3% after the announcement of the US Federal Reserve

The US Federal Reserve has decided to implement a series of drastic measures to support a global economy that is experiencing problems with the coronavirus pandemic.
The US central bank announced a reduction in the interest rate at a target range from 0% to 0.25%. In addition, the Fed also planned to inject $ 700 million to buy cash and mortgage securities:

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1 The price of gold increased by 3% after the announcement

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“The Federal Reserve closely monitors credit markets and is prepared to use its full range of tools to support credit flow to households and businesses and thereby promote maximum employment and price stability goals,”

said the US central bank in a statement.

This will bring total assets from the federal reserves to a record $ 5 trillion.

Last week, the Fed also announced it would introduce $ 1.5 trillion in the repo market (short-term loans). This is the third time that the US central bank has taken emergency measures to protect financial markets and the economy from the global financial crisis of 2008.

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The price of gold increased by 3% after the announcement

In a complementary move, eight of the largest US banks said they would stop repurchasing shares until the second quarter:

“Our collective objective is to use our significant capital and liquidity to provide maximum support to individuals and small businesses. We want to support the wider economy through loans and other important services ”,

it is mentioned in the joint statement issued by banks.

The news of the Fed measures, however, did not have the expected positive effect on the stock markets. Dow Jones Industrial Average futures transactions were halted Sunday evening, when prices fell 5%. The US dollar fell sharply after the announcement, while the price of gold rose by 3%.

It is apparent that investors are not sufficiently encouraged, especially that the coronavirus pandemic cannot be controlled with economic measures. The number of cases identified in the US is close to 4000, but most experts claim that in fact there are many more.

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The crypto market, on the other hand, reacted “strangely”. The price of Bitcoin increased by over 12%, from $ 5,302 to $ 5,955 in less than an hour after the Fed announcement. Shortly after, he returned to the level of 5,300. At the time of publication, the Bitcoin price is trading around $ 4,950