Expectations of a dovish Fed in 2024 have caused the dollar to decline, helping gold recover from its recent lows.
The prices of gold touch highs of more than two weeks this Tuesday, while the dollar falls due to expectations that the Federal Reserve has stopped raising interest rates, and investors were awaiting the minutes of the central bank’s latest meeting for new clues about its monetary policy.
The orcash ro gained 0.6%, to $1,988.39 per ounce, after touching its highest level since November 3, while gold futures in the United States advanced 0.5%, to $1,990.20.
Expectations of a dovish Fed in 2024 have caused a dollar decliner, helping gold recover from its recent lows, said Carlo Alberto De Casa of Kinesis Money.
“I don’t think the gold rally is related to physical demand. What we are seeing now is only related to Fed rates, yields and expectations in 2024“, he pointed.
The market expectation with the Fed: are rates maintained?
The dollar is trading at minimums of more than two months and a half, making gold cheaper for holders of other currencies. Meanwhile, the yield on the benchmark 10-year US Treasury bond was hovering around two-month lows reached last week.
Investors’ attention is now focused on the minutes of the last Fed meeting. Signs of slowing inflation in the United States have raised expectations that the central bank is done raising rates.
Jerome Powell.webp
The markets andthey expect the Fed to maintain rates unchanged at the December meeting and currently rate the possibility of a cut of at least 25 basis points by May at 60%, according to CME’s FedWatch tool. Lower rates reduce the opportunity cost of holding bullion.
In other precious metals, spot silver improved 0.7% to $23.57 an ounce; platinum gained 0.5%, to $923.09; and palladium fell 0.7%, to $1,085.29.
Source: Ambito
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