Gold halts its winning streak against a stable US dollar.
Gold prices snap a winning streak that began on February 28, falling to roughly $2,160 per troy ounce during Asian trading hours on Friday. Yellow metal prices have risen on market predictions that the Federal Reserve (Fed) will begin a cycle of interest rate cuts in June.
The gold price rose on predictions that the Federal Reserve might decrease interest rates in June.
Fed Chair Jerome Powell’s statements on his second day of testimony before the US bolstered the upward momentum in gold prices. Congress, where he restated the central bank’s position, fueling speculation about possible rate reduction.
Fed Chair Powell suggested that rate decreases could occur in 2024.
Fed Chair Powell has hinted at potential borrowing cost decreases later this year, assuming inflation remains on track to meet the Fed’s 2% target. According to the CME FedWatch Tool, there is a 5.0% chance of a 25 basis point rate decrease in March, with chances of cuts in May and June at 25.5% and 56.7%, respectively.
Loretta Mester, President of the Cleveland Fed, addressed the Virtual European Economics and Financial Center, expressing concern about inflation’s possible persistence throughout the year. She suggested that if the economy performs as expected, rate decreases could be implemented later this year.
On the data front US initial jobless claims remained constant at 217K for the week ending March 1, compared to predictions of 215K. Meanwhile, US nonfarm productivity remained constant, increasing by 3.2% in the fourth quarter of 2023, slightly exceeding market forecasts of 3.1%.
Traders are looking forward to Friday’s employment data, which includes average hourly earnings and nonfarm payrolls, to acquire a better understanding of the US economy.
