Gold on the Verge of Record as Investors Eye Fed Rate Cut Bets
Published on: Mar 05, 2024|2 min read
London: 5 March 2024 (TraderMade): Gold prices are soaring towards all-time highs, fueled by growing speculation that the Federal Reserve will cut interest rates in June.
This week is crucial, with investors closely following Fed Chair Jerome Powell's testimony and critical economic data for further guidance.
Gold (XAUUSD) surged by 4.71% over the last week and traded at 2124.419.
Key Takeaways
- Gold inches closer to record: Spot gold sits just $10 shy of its peak at $2,135.40, driven by hopes of imminent rate cuts.
- Fed's dovish shift? Analysts and experts expect the Fed to cut rates by June, bolstering gold's appeal.
- Powell's testimony in focus: Market participants await Powell's comments on Wednesday and Thursday for clues about the timing of the rate cut.
- Economic data on deck: US jobs data, including JOLTS and ADP employment figures, will be closely scrutinized.
- The dollar is under pressure: The US Dollar weakens ahead of Powell's testimony and key data releases.
Uncertainties Remain
- Fed's stance: While Powell might emphasize no immediate rate cuts due to strong economic growth, his tone will be crucial.
- Inflation control: The Fed must see sustained inflation decline before committing to rate cuts.
Gold's Future
The near-term direction of gold hinges on Powell's testimony, upcoming economic data, and the Fed's ultimate decision on rate cuts. With conflicting factors at play, the next few days will be decisive for the precious metal's path toward potentially setting a new record.
