2023-09-25 14:46:41
Gold futures prices continue to fall. Most recently, it dropped below the $1,940 level, affected by the strengthening of the dollar. and the rebound in US government bond yields.
At 9:42 p.m. Thai time, gold contracts on the COMEX (Commodity Exchange) market will be delivered in December. minus $9.80 or 0.50% to $1,935.80/ounce.
A stronger dollar reduces the attractiveness of gold. By making gold contracts more expensive for holders of other currencies Meanwhile, a rebound in US government bond yields will increase the opportunity cost of holding gold. This is because gold is an asset that has no return in the form of interest.
The market was also pressured by concerns regarding the Federal Reserve (Fed) keeping interest rates high for a long time to stem inflation.
The Fed’s Monetary Policy Committee (FOMC) decided to maintain short-term interest rates at 5.25-5.50% at last week’s meeting. which is the highest level in 22 years
However, in forecasting the policy interest rate (dot plot), Fed officials signaled another interest rate hike by the end of this year. and signaled only 2 interest rate cuts in 2024, from the Fed’s original forecast that there would be more than 2 interest rate cuts next year. This signals that the Fed will keep interest rates high for longer than expected to stem inflation.
Michelle Bowman, a member of the Federal Reserve’s board of governors, said the Fed needed to continue raising interest rates to stem inflation.
“I continue to expect the Fed will need to continue raising interest rates to get inflation back to target in a timely manner,” Ms Bowman said, adding that economic data indicated there was still not enough progress in stemming inflation. Return to the Fed’s 2% target.
Bowman’s statement echoed that of Boston Fed President Susan Collins, who has said she supports further interest rate increases. If inflation continues to slow down
“The recent inflation data is satisfactory. But it is still too early for the Fed to declare victory.”
“I think the Fed should keep interest rates high for longer than expected. And the Fed should not rule out the option of raising interest rates once more. Fed officials should be prepared to accomplish their assigned missions,” Ms. Collins said.
Markets watch US government shutdown or shutdown on Oct. 1 if Congress still makes no progress in passing a temporary budget. and forward it to President Joe Biden to sign into law by September 30.
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