Investor Hopes for a Quick Rate Cut Dashed | MintedMarket USA Investor Hopes for a Quick Rate Cut Dashed | MintedMarket USA

Free insured shipping on all orders over $199 USD or $299 CAD.

Search

Investor Hopes for a Quick Rate Cut Dashed

Investor Hopes for a Quick Rate Cut Dashed

Investor Hopes for a Quick Rate Cut Dashed

Gold is having a rough week. The beginning of the week saw gold dip slightly but it was still holding around $2050 per ounce. It maintained its strength by vetting against the weaker US dollar and high demand driven by the approaching Lunar New Year holiday - the largest gold-buying holiday, ahead of Diwali. This was evident from the increase in sales some Chinese precious metal retailers had seen in the last quarter of 2023. However, Gold’s rebound from a bearish trend was short-lived and it ran into resistance by Wednesday. 


The dollar index rose to the highest it has been in 10 days making bullion more expensive to purchase by other currency holders, destabilizing the price of gold. Following the higher dollar index, comments by Federal Reserve Governor Christopher Waller sent the price of gold tumbling down 1.1% to $2006 per ounce. Retail sales for December were strong as it was 0.2% above the predicted value, prompting officials to comment that there is no need to rush and take interest rates down. They will proceed with cuts methodically to prevent an economic slowdown and to ensure that inflation will sustainably return to target levels. This comment reined in on investors’ expectations that there will be an interest rate cut in March. After these sentiments from the Federal Reserves, it is more probable that the interest cuts will happen later this year around June. With the US dollar going strong and the delay in rate cuts, it will be difficult for gold to hold a positive upward trend. However, with geopolitical tensions still high and a volatile market, gold is still seen as a safe investment in uncertain times for investors to hedge their bets on. Therefore, the price of gold is expected to stabilize and trade around $2000 to $2035. Currently, at the time of writing, the spot price of gold is hovering around $2020. 


On Wednesday, the spot price of other metals also dropped with silver down to $22.50 per ounce, platinum down to $885 per ounce, and palladium slipping around 2% to $917 per ounce. The price of platinum and palladium have almost evened out, so the rate at which platinum is replacing palladium in autocatalyst production is also slowing. 

Gold is having a rough week. The beginning of the week saw gold dip slightly but it was still holding around $2050 per ounce. It maintained its strength by vetting against the weaker US dollar and high demand driven by the approaching Lunar New Year holiday - the largest gold-buying holiday, ahead of Diwali. This was evident from the increase in sales some Chinese precious metal retailers had seen in the last quarter of 2023. However, Gold’s rebound from a bearish trend was short-lived and it ran into resistance by Wednesday. 


The dollar index rose to the highest it has been in 10 days making bullion more expensive to purchase by other currency holders, destabilizing the price of gold. Following the higher dollar index, comments by Federal Reserve Governor Christopher Waller sent the price of gold tumbling down 1.1% to $2006 per ounce. Retail sales for December were strong as it was 0.2% above the predicted value, prompting officials to comment that there is no need to rush and take interest rates down. They will proceed with cuts methodically to prevent an economic slowdown and to ensure that inflation will sustainably return to target levels. This comment reined in on investors’ expectations that there will be an interest rate cut in March. After these sentiments from the Federal Reserves, it is more probable that the interest cuts will happen later this year around June. With the US dollar going strong and the delay in rate cuts, it will be difficult for gold to hold a positive upward trend. However, with geopolitical tensions still high and a volatile market, gold is still seen as a safe investment in uncertain times for investors to hedge their bets on. Therefore, the price of gold is expected to stabilize and trade around $2000 to $2035. Currently, at the time of writing, the spot price of gold is hovering around $2020. 


On Wednesday, the spot price of other metals also dropped with silver down to $22.50 per ounce, platinum down to $885 per ounce, and palladium slipping around 2% to $917 per ounce. The price of platinum and palladium have almost evened out, so the rate at which platinum is replacing palladium in autocatalyst production is also slowing. 

Comments 

No comments

Leave a comment
Your Email Address Will Not Be Published. Required Fields Are Marked *