2023-12-15 19:22:01
Gold futures price close to $2,060 in response to Fed signal to cut interest rates
InfoQuest – Gold futures prices rebounded to near the $2,060 level today. Responding to the results of the US Federal Reserve’s (Fed) monetary policy meeting this week.
At 7:29 p.m. Thai time, gold contracts on the COMEX (Commodity Exchange) market will be delivered in February. Added 13.30 or 0.65% to $2,058.10/ounce.
Commerzbank AG, a large German bank Issued a report stating that Gold prices are likely to surge towards $2,150/ounce in the second half of 2024, supported by the Fed signaling an end to the cycle of interest rate hikes. and will start reducing interest rates next year
In addition, gold prices also received positive factors from the weakening of the dollar. and the fall in US government bond yields. After the Fed announced the end of the interest rate uptrend
A weaker dollar increases the attractiveness of gold. This makes gold contracts cheaper for holders of other currencies. As for the fall in US government bond yields It will help reduce the opportunity cost of holding gold. This is because gold is an asset that has no return in the form of interest.
CME Group’s FedWatch Tool indicates investors are betting the Fed will cut interest rates as early as its March 2024 meeting. It was originally expected that the Fed would cut interest rates for the first time at its May 2024 meeting. After the Fed signaled the end of the cycle of raising interest rates. and cut interest rates at least 3 times in 2024 at the meeting of the Fed Monetary Policy Committee (FOMC).
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 signal to cut interest rates 3 times, by 0.25% each time, for a total of 0.75%.
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