Gold futures prices continue to rebound. Most recently, it broke through the level of 2,040 dollars, with positive factors of weakening the dollar. and the fall in US government bond yields.
At 10:36 pm Thai time, gold contracts on the COMEX (Commodity Exchange) market will be introduced in April. it added $17.10 or 0.84% to $2,041.20/oz.
A weaker dollar increases the attractiveness of gold. This makes gold contracts cheaper for holders of other currencies. Regarding 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 interest income.
Investors will be watching the minutes of the Federal Open Market 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 decided unanimously to maintain short-term interest rates at 5.25-5.50% at the meeting. This is the highest level for over 22 years.
Announcement of maintaining interest rates this time As expected by the market This is the fourth rate freeze in a row after the Fed has raised interest rates 11 times since the start of the rate hike cycle in March 2022. As a result, the Fed interest rates 5.25% However, the Fed indicated 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 due to deliver his semi-annual statement on US monetary policy and economic conditions to Congress in March.
Powell is due to deliver a statement to the House Financial Services Committee on March 6, before addressing the Senate Banking Committee on March 7.
Investors are keeping an eye on Mr Powell’s statement. This will happen before the Fed’s monetary policy meeting on March 19-20 to find signals indicating the direction of the Fed’s interest rate. After the US released higher than expected CPI and PPI indices 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. It was previously expected to happen as early as March. But it was postponed until May. Prior to the latest, the interest rate cut was expected to take place in June.
In addition, the higher than expected inflation numbers have caused investors to start 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 only 0.25% 3 times this year, from the original expectation that the Fed will cut interest rates more than 4 times.
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