2023-12-21 15:23:44
Gold futures prices rebounded above the $2,050 level following the US economy expanded lower than expected in the 3rd quarter of 2023, which will be a supporting factor for the US Federal Reserve (Fed) to stop raising interest rates. and begin reducing interest rates next year.
At 10:10 p.m. Thai time, gold contracts on the COMEX (Commodity Exchange) market will be delivered in February. added $6.90 or 0.33% to $2,054.60/ounce.
In addition, gold prices also received positive factors from the weakening of the dollar. and the fall in US government bond yields.
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.
The U.S. Department of Commerce today released its third estimate for 3rd quarter 2023 gross domestic product (GDP), saying the U.S. economy expanded 4.9% in the quarter. This was lower than analysts’ estimates of 5.1%, while the first and second estimates were 4.9% and 5.2%, respectively.
The US economy expanded 2.2% and 2.1% in the first and second quarters, respectively.
CME Group’s FedWatch Tool indicates that investors expect the Fed to start cutting interest rates at its March 2024 meeting. And the Fed will 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 has signaled to cut interest rates 3 times, by 0.25% each time, for a total of 0.75%.
Investors will be keeping an eye on the Personal Consumption Expenditures (PCE) price index due to be released on Friday. The PCE index is the Fed’s preferred measure of inflation. Because it can detect changes in consumer behavior and covers the prices of goods and services more broadly than the Consumer Price Index (CPI).
Analysts expect that the Headline PCE index, which includes food and energy categories, rose 2.8% year-on-year in November from 3.0% in October.
When compared monthly, it is expected that the general PCE index will not change in November. or increased by 0.0% from the level of 0.0% as well in October.
As for the Core PCE Index (Core PCE), which does not include food and energy categories. It is expected to increase 3.4% in November year-on-year from 3.5% in October.
On a monthly basis, it is expected that the core PCE index increased 0.2% in November following also increasing 0.2% in October.
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