Daily digest market movers: Gold price advances as US Dollar corrects
- Gold price rises to $2,190, capitalizing on a modest correction in the US Dollar. The precious metal jumps higher as Federal Reserve policymakers look set to lower interest rates in June amid increasing evidence that inflation is moving in the right direction. The US Dollar Index (DXY), which measures the US Dollar’s value against six major currencies, falls from a one-month high of 104.50 to 104.10.
- The Fed is confident about easing inflationary pressures even though price pressures turned out hotter than expected in the first two months of 2024. Fed Governor Lisa Cook said in an event hosted by Harvard University on Monday, "Although housing-services inflation remains quite high, the current low rate of increase on new rental leases suggests that it will continue to fall." Cook endorsed a cautious approach when asked about monetary policy easing.
- Separately, Chicago Fed Bank President Austan Goolsbee said in an interview with Yahoo Finance on Monday that the inflation situation is uncertain due to higher housing inflation. However, he is confident that the fundamental story of inflation returning to the 2% target has not changed.
- Last week, the Fed stuck with projections of reducing interest rates three times this year. This has reinforced market expectations for the Fed to cut interest rates from the June policy meeting. According to the CME FedWatch tool, there is an almost 70% chance that a rate cut will be announced in June. The chances were at 60% last week before the Fed’s policy announcement. Increased Fed rate cut expectations have kept the downside in the Gold price limited.
- This week, investors will shift focus to the core PCE price index data for February to know more about Fed rate-cut timing. The annual core PCE reading is anticipated to have grown steadily by 2.8%. The monthly inflation data is expected to have risen by 0.3%, slower than the 0.4% increase seen in January.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
If you like, reward to support.
Hot
No comment on record. Start new comment.