2024-02-20 20:00:56
Gold futures prices rebound to surpass $2,040. Weak dollar, falling bond yields support the market.
InfoQuest – Gold futures prices rose to near the 2,040 level, with positive factors from the weakening of the dollar. and the fall in US government bond yields.
At 8:26 p.m. Thai time, gold contracts on the COMEX (Commodity Exchange) market will be delivered in April. added $14.90 or 0.74% to $2,039.00/ounce.
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.
Investors will be watching the minutes of the Federal Reserve Monetary Policy Committee (FOMC) meeting on January 30-31, as well as statements from Federal Reserve (Fed) officials, for signs indicating the direction of US interest rates.
The FOMC unanimously decided to maintain short-term interest rates at 5.25-5.50% at the meeting. This is the highest level in more than 22 years.
Announcement of maintaining interest rates this time As expected by the market This is the fourth consecutive rate freeze following the Fed raised interest rates 11 times since the start of the rate hike cycle in March 2022. As a result, the Fed raised interest rates by 5.25%. However, the Fed signaled that it has no plans to cut interest rates. This is because inflation remains above the Fed’s target.
Meanwhile, the market is keeping an eye on Fed Chairman Jerome Powell, who is scheduled to deliver his semi-annual statement on US monetary policy and economic conditions to Congress in March.
Powell is scheduled to deliver a statement to the House Financial Services Committee on March 6, before addressing the Senate Banking Committee on March 7.
Investors keep an eye on Mr. Powell’s statement. This will take place before the Fed’s monetary policy meeting on March 19-20 to find signals indicating the Fed’s interest rate direction. After the United States released higher-than-expected CPI and PPI indexes last week.
The release of higher-than-expected inflation numbers has led investors to postpone their forecasts for the first Fed rate cut this year to June. Previously expected to happen as early as March. But it was postponed to May. Before the latest, it was expected that the interest rate cut would happen in June.
In addition, the higher-than-expected inflation numbers have caused investors to begin lowering their expectations for an interest rate cut in June. And as a result, it is expected that the Fed will cut interest rates by 0.25% only 3 times this year, from the previous expectation that the Fed will cut interest rates more than 4 times.
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