Asset Manager

Gold prices soared to a record Wednesday after the Federal Reserve slashed its key interest rate — a potentially inflationary move that undercut the dollar and boosted the metal’s appeal as a stable investment.The Fed cut its benchmark federal funds rate by a widely expected half percentage point, following a bold three-quarter-point reduction last week that was aimed at staving off a U.S. recession.

Following the Fed decision, gold for April delivery surged to an all-time high of $942.20 an ounce in aftermarket trading on the New York Mercantile Exchange. It later pulled back to $935 an ounce, still up $4.20.

Before the rate cut, gold settled $4.50 lower at $926.30 an ounce as investors waited to see if the central bank would cut by half a point or a more modest quarter point as some had expected.

“The market has reacted to the cut. It had a powerful impact on gold despite the fact that it was broadly anticipated,” said James Steel, a precious metals analyst at HSBC in New York.

Many moons ago I was a commodities trader and we were making the case for gold at $273 and ounce. We threw everything at the reports we did, including discussing the use of gold in catalytic converters for diesel engines… me thinks that may not be the case at the moment. And what of my commodities business? I sold the business just before one of the biggest commodity booms in history.

I am bitter….?