Gold futures price approaches $2,060 in response to the Fed’s signal to cut interest rates
InfoQuest – Gold futures prices rebounded to near the $2,060 level today. Response to the results of the US Federal Reserve’s monetary policy meeting this week.
At 7:29 PM Thailand time, gold contracts will be delivered on the COMEX (commodity exchange) market in February. It added 13.30, or 0.65%, to $2,058.10 per ounce.
Commerzbank AG, a major German bank, issued a report stating that gold prices are likely to rise towards $2,150 per ounce in the second half of 2024, supported by the Fed signaling the end of the interest rate hike cycle. They will start cutting interest rates next year
In addition, gold prices also received positive factors from the weakness of the dollar. And lower US government bond yields. After the Federal Reserve announced the end of the upward trend in interest rates
A weak dollar increases the attractiveness of gold. This makes gold contracts cheaper for holders of other currencies. As for the decline in US government bond yields, it will help reduce the opportunity cost of owning gold. This is because gold is an asset that does not return in the form of interest.
CME Group’s FedWatch tool indicates that investors are betting that the Fed will cut interest rates as early as its March 2024 meeting. The Fed was originally expected to cut rates for the first time at its May 2024 meeting. The Fed is calling for the end of the cycle of interest rate increases. And cut interest rates at least 3 times in 2024 at the Federal Reserve Monetary Policy Committee (FOMC) meeting.
In addition, investors expect the Fed to cut interest rates 6 times in 2024, cutting interest rates by 0.25% each time, for a total of 1.50%, more than the Fed indicated to cut interest rates 3 times, by 0.25% each time, for a total of 0.75%.
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