Daily digest market movers: Gold price clings to gains near $2,260
- Gold price hovers near fresh all-time highs around $2,260 despite multiple headwinds. Improved outlook of the US Dollar due to strong United States Manufacturing PMI and a decline in bets supporting a rate cut by the Federal Reserve in June failed to push the Gold price down.
- The divergence between the economic prospects of the US and other developed economies has strengthened the US Dollar outlook. While major developed economies struggled to deliver meager growth in 2023, the US economy grew at a robust pace of 2.5%. Adding to this, the US Manufacturing PMI has returned to expansion, strengthening the economic outlook further.
- On Monday, the US Institute for Supply Management (ISM) reported that its Manufacturing PMI came in above the 50.0 threshold at 50.3, better than expectations of 48.4 and the prior reading of 47.8. The Manufacturing PMI returned to expansion after contracting for 16 straight months.
- The US strong economic outlook has dented market expectations for the Fed to begin reducing interest rates from June. According to the CME FedWatch tool, traders are pricing in a 63% chance that the Fed will trim interest rates in June, down from 70% a week ago.
- Still, investors seem to be confident about three rate cuts this year as projected by the Fed in its latest dot plot. Fed Chair Jerome Powell said on Friday after the release of the US core PCE Price Index data for February that the latest US inflation data was "along the lines of what we would like to see." However, Powell also acknowledged that there is no need for the Fed to rush for rate cuts.
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.